News : 27 July 2008

News digest

Compiled by Clive Goldthorp

1) SAIC Motor/MG and Roewe

Longbridge MGs off to flying start
Jon Griffin, Business Editor, Birmingham Mail, 18th July, 2008

THE relaunch of Longbridge after three years at a standstill has sparked a £5 million sales surge, with half of the MG output for 2008 already sold. As Birmingham’s best known factory finally gears up for the return of volume production next month, SAIC/Nanjing revealed the sale of 340 two-seater MGTF sports cars. The figure represents nearly 50 per cent of the Chinese production target of up to 700 cars by the end of the year, with orders from all over the UK.

The car will sell through a network of 55 dealerships nationwide for from £16,399 on the road – bringing one of the world’s most popular motoring brands back from the dead following MG Rover’s collapse in April 2005. MG corporate communications manager Eleanor de la Haye said: “We are pleased at the interest in the model from all over the UK.

“We are all set and production will launch on August 1. We have 340 orders already and there are 55 dealers across the UK in place.” Ms de la Haye said the Chinese bosses were determined to push ahead with the production launch despite the worst retail slowdown for years hitting the high street in the UK. “That does not worry us too much. This is not a gas-guzzling car, it’s a really economical car.”

Around 165 workers will be in place at Longbridge by the relaunch of production and the firm is looking to bump up employee numbers with a major recruitment drive. “We are looking in a variety of different areas, including sales and marketing, manufacturing, human resources and finance.” Ms de la Haye said. A number of pre-production MGs have already been made at Longbridge and were shown to dealers at a pre-launch event earlier this week. The first cars will be delivered to showrooms in September while the Chinese say designers are already planning other “exciting” new models.

Nanjing bought the assets of the old MG Rover group for £53 million in July 2005, beating rivals SAIC in the race. Now SAIC is in the driving seat after taking over Nanjing – whose MG factory in China was launched last year – in the final days of 2007.

Assembly lines at the Birmingham factory were halted on April 7, 2005, as administrators PricewaterhouseCoopers were appointed.

Motorists rush to pick up new MG TF
Duncan Tift, Business Staff, Birmingham Post 21st July, 2008

The new Longbridge-made MG TF sports car may not be in full production yet but it is already proving a hit with motorists who are clamouring to buy a limited edition version of the roadster. To mark the relaunch of the car, which is not due in showrooms until September, owner Nanjing Automobile is producing a limited 500 run of the LE500 model.

But such is the expectation among MG enthusiasts that 390 of the cars have already been snapped up unseen, and dealers around the country are suggesting people interested in the remaining cars get their orders in quickly. The cars painted orange and white, have already sold out leaving buyers with a choice of black, blue, red or grey. One dealer said: “We thought they were going to be popular but nothing like this.”

The limited edition vehicle features extras such as 16 in alloy wheels, in-car audio with iPod connector, leather seats, upgraded brakes and rear parking sensors. However, it is thought to be much more than just a few gimmicks that are luring people into placing orders. MG enthusiasts starved of the marque for so long are eager to snap up a slice of motoring heritage in what is seen as a new beginning for the Longbridge company.

One of the dealers chosen to sell the cars, Crawley Down Group, based in Sussex, summed it up by saying: “This is a relaunch of one of the best known and best loved brands in the world.” It may be pure marketing hype but it is having an effect and the company has said that if anyone is interested in acquiring one of the new vehicles then they have to act now.

The clamour comes despite concerns that the price of the cars – £16,399 on the road – was a little higher that most people were expecting. Not surprisingly, the Chinese company’s sales and marketing director Gary Hagen was much keener to stress the positives. “We are delighted to be able to bring in such a highly specified car at such a reasonable price,” he said. “When you consider the level of specification that comes with the LE500, the package is extremely competitive.”

The LE500 features revised looks, upgraded engine that “delivers an authentic British sports car driving experience” according to NAC, and a host of design refinements and extras that have brought it bang up to date. Attractions like sports-styled leather seats and a piano black interior also help to give the car a stylish new look.

Mr Hagen said the backing of NAC parent Shanghai Automotive (SAIC) – China’s largest car maker – together with the fact the LE 500 had been designed, engineered and was being built in the UK, were playing a major role in the car’s success.

MG car sales – not what SAIC expected
China Car Times 22nd July, 2008

The historic MG brand maybe in trouble again, after missing its half yearly sales targets by almost 50%. Since its relaunch under NAC-MG-SAIC ownership, MG have struggled to gain any massive market share in the mid class sedan market against rivals such as the Camry and the Accord. MG only sold 1900 vehicles from January to May, averaging around 400 cars per month, far from the 5000 vehicle target that SAIC initially set for the former British marque.

China Car Times could speculate that the lack of advertising for the MG7 and the lack of an automatic gearbox in the MG7 at launch time would not have helped sales figures at all, although an automatic MG7 is expected in August 08. MG will boost their line up with the MG3 SW and the MG3 hatchbacks later this year, hopefully improving MG’s sales figures for 2008.

2) Jaguar and Land Rover

Jaguar is desirable luxury car brand, but Land Rover sales suffer
Duncan Tift, Business Staff, Birmingham Post 16th July, 2008

Sales of Jaguar’s new XF model have helped make the Midland luxury car company the most desirable brand in Western Europe, although the picture is less healthy for stablemate Land Rover as cash-conscious drivers continue to shun gas-guzzling off-roaders.

According to the latest data from the European Automobile Manufacturers’ Association (ACEA), the number of Jaguars registered in Western Europe in June rose more than 31 per cent year-on-year last month – the highest by any manufacturer in Western Europe.

In all, Jaguar sold 3836 models in June compared with 2924 in the same month last year. The continuing popularity of the new XF saloon is thought to be mainly responsible for the good figures. By way of comparison, Jaguar’s sales rose 70.3 per cent year-on-year in April, the first full month of the XF’s availability.

The news will be welcomed by the company’s new owner, India’s Tata Motors but is likely to leave former parent Ford less impressed. However, the news is less than rosy for Land Rover, which saw a 36.7 per cent drop in year-on-year sales last month. The sales helped to drag down the combined group’s overall performance by 21.3 per cent in June.

Professor David Bailey, of Birmingham Business School and Birmingham Post blogger, said: “The continuing popularity of Jaguar’s XF and XK are the main reasons for its success, while the high cost of fuel has undoubtedly had an impact on Land Rover. “However, we should remember that Land Rover had record sales only a year ago and they are probably coming off that, making comparisons difficult.”

Despite the performance he said the long term picture for Land Rover was still encouraging. “They are also continuing to do well in North America while new market opportunities in places like Russia and India will also have a bearing on future sales,” he said. Jaguar’s main rivals were left trailing in its wake with Audi down 5.5 per cent, Mercedes down seven per cent and Lexus down 25 per cent.

Only BMW showed any growth – up 0.1 per cent – and the Mini continued to show its popularity with sales up 8.3 per cent last month compared with June 2007. So far this year its sales are up almost 19 per cent. The only other manufacturers outside the UK to show any growth last month were Skoda (1.6 per cent) and Renault’s low-cost subsidiary Dacia (9.7 per cent).

The heavy declines in June mark the fourth monthly drop in sales this year and the rapidly deteriorating economic conditions are being blamed for new car buyers shunning dealers. In total, new car registrations in Western Europe in June slumped 7.9 per cent to 1.43 million vehicles. Italy and Spain bore the worst of it, as new car registrations plunged 20 per cent and 31 per cent, respectively.

Registrations of new cars in the first half fell two per cent to 8.34 million vehicles as a result of last month’s drop, which already followed a 7.8 percent decline in May. Former JLR parent Ford and its Swedish marque Volvo – the sole survivor of the Premier Automotive Group – were luckier than most, sliding less than one per cent each. The region’s other major carmaker, Toyota, in Derbyshire, saw a major decline, slumping almost 19 per cent.

For the UK as a whole, sales were down 6.1 per cent last month and are down 1.6 per cent so far this year.

Jaguar leaps for £100k market
John Griffiths , The Financial Times 18th July, 2008

Jaguar and Land Rover, now owned by India’s Tata group, are drawing up a new business strategy that will take both brands upmarket into the £100,000-plus pricing territory currently occupied by only a handful of luxury carmakers such as Bentley. David Smith, the newly installed permanent chief executive of both companies, said the brands could be taken “a lot further up the market”.

“Both Jaguar and Land Rover, through the Range Rover brand, should be able to produce very credible products to appeal to people in those markets,” he told the Financial Times. Mr Smith was speaking after a visit this week to the British-based companies by Ratan Tata, the Indian group’s chairman, for the second time since Tata bought Jaguar and Land Rover for $2bn in April.

At that time, Tata committed to supporting the current business plan, which runs for the next two and a half years and includes the replacement for the flagship XJ saloon range to be launched late next year. But Mr Tata, who was shown further prospective projects during this week’s visit, was now “very enthusiastic” about the companies’ wider long-term potential, Mr Smith said.

He thought it too early to set out details of any assault into the market for cars costing £100,000 or more, which has already proved a fertile area for Aston Martin – of which Mr Smith is a former director – and Bentley. Bentley sales rose above 10,000 units for the first time last year and Aston Martin expects to cross a similar threshold next year.

Executives at Jaguar and Land Rover say they believe much of the potential market for cars costing more than £100,000 lies in China, the Middle East, Russia and other fast-developing markets. “The number of high net worth individuals in these markets is increasing exponentially and they now have the ability and desire to buy such vehicles,” said Mr Smith.

“To be honest, even now we sometimes can’t produce vehicles with enough in them in terms of luxury to satisfy such customers,” he added. The most expensive Jaguar model, its Daimler saloon, has a list price of £80,000, but the majority of Jaguar’s range is much cheaper, at between £25,000 and £75,000. However, there are no plans to replace Jaguar’s cheapest model, the X-TYPE.

This would leave Jaguar with entry-level pricing of about £35,000 for the recently launched XF range. Land Rover’s most expensive model, the supercharged Vogue SE Range Rover, costs £72,000.

In spite of the fuel price- and credit crunch-driven downturn in luxury car sales in North America and Europe, Mr Smith forecast that Jaguar’s global sales this year would remain unchanged on 2007, at about 60,000 units, and Land Rover’s at about 226,000, thanks to strong growth in China and other expanding markets. “It might be down in the US but in China, the Middle East and Russia it’s booming. While the market’s hard, it’s not too hard,” he said.

Land Rover maps out green route 22nd July, 2008

Tata-owned Land Rover is investing £700m over the next five years to make its cars greener. Concerns over the environment, rising oil prices and a global credit crunch have been bad news for big off-roaders or sport utility vehicles. Land Rover acknowledges it has to raise its game.

The company, celebrating its 60th anniversary this year and bought by Indian conglomerate Tata in March, will start its move towards greener motoring later this year when it introduces a stop-start system on Freelander diesel models. Stop-start turns the engine off while idling in traffic and automatically restarts when the accelerator is pressed. This technology will gradually be introduced across the Land Rover fleet said managing director Phil Popham.

This will be followed by further innovations, dubbed e-terrain technology by the company. These include diesel-electric hybrid models and electric rear axle drive (ERAD) which will allow the vehicle to move off without starting the engine as well as supplying extra power over tough terrain. The research into the environmental technology has been jointly funded by the British government and has involved a number of UK suppliers.

Popham said: “Over the past 60 years Land Rover has delivered real benefits worldwide, a quarter of all vehicles used by aid agencies around the world are Land Rovers but the challenge now is sustainability. “We have to make vehicles that still meet the go-anywhere requirements that our cars are renowned for while addressing the concerns for the environment.” In mapping out a greener route for the future, Popham added: “We will reduce our CO2 footprint but we will not compromise on the ability of our vehicles to tackle the toughest conditions.”

Product development director Phil Hodgkinson added: “As well as new powertrain and transmission technologies, we will also be looking to reduce the weight and size of our vehicles and you will also see a step change in terms of aerodynamics. “Stop start will be introduced on the Freelander diesel later this year and that alone will reduce the CO2 emissions from 194g/km to 179g/km.”

Hodgkinson said the company had still not made a decision on the LRX concept unveiled at the Detroit Motor Show at the start of the year.

LONDON SHOW: Lay off executive car makers – government minister
Andrew Charman,, 24th July, 2008

The UK government has been warned in the rush to ‘greener’ motoring not to target Britain’s executive car manufacturers – by one of its own ministers. Delivering the first BenGold lecture during the British International Motor Show at London’s ExCel Centre, Lord Digby Jones praised the expansion of electric cars present at the show, but added that such expansion should not be at the expense of Britain’s established and highly successful upmarket car industry. To do so risked that industry moving elsewhere in the world.

“If in doing so governments of any calibre declare war on Jaguar, on Bentley at Crewe, Rolls-Royce at Goodwood, on Aston Martin, it will not make this planet cleaner at all,” Lord Jones said. “What globalisation does is allow choice – a manufacturer can say ‘okay, if you don’t want us, we will go to another country that does.’ Whether such cars are made in Britain or a country that makes them feel more welcome, China, India, America, these brands will survive.”

Lord Jones, a former adviser to Jaguar/Land Rover and one of the government’s non politically-affiliated ministers appointed last year by prime minister Gordon Brown [who inspected electric vehicles at the show this week] on the basis of their specific expertise, said he was all in favour of pressure being put on manufacturers to produce technology improving such areas as emissions. “But don’t let it get to the point where these manufacturers no longer feel welcome, where they are victimised and demonised. It’s not going to help the 160,000 people working in the industry, it’s not going to help the exchequer [UK treasury].”

Lord Jones added that he wanted the argument for improving cars balanced in a way that it wasn’t currently, and he also wanted an end to claims that Britain no longer has a car manufacturing industry. “Last year, 1.5m cars were made in Britain, and we exported 77% of them,” Lord Jones said. “Six out of the top 10 motor manufacturers make cars in the UK, while 19 of the top 20 component manufacturers make parts in the UK. Our automotive manufacturing capability employs 160,000 people, and another 200,000 are employed in the component supply industry.”

Lord Jones emphasised that Britain has a particular skill for producing cars for the upmarket sector. Having attended the motor show direct from a business trip to Saudi Arabia, he related how the first five cars he saw in Riyadh were a Jaguar, Land Rover, Aston Martin, Bentley and Mini, all made in Britain. He also suggested that Jaguar/Land Rover would not have been nearly such an appealing purchase to Indian giant Tata, had the two brands not been British.

“Jaguar has orders for the XF three years in advance. Aston Martin’s ’09 allocation for Moscow was sold almost immediately,” Lord Jones said, adding; “The most productive car plant in Europe, and second in the world, is Nissan at Sunderland. Ford’s most productive car plant anywhere before it was sold was Jaguar in Liverpool. We make fabulous, wonderful cars in this country, and next time you hear someone denigrating our car industry, you should please call for a bit more balance in the argument.”


New Fiat platform could be used for bigger Mini model
Motor 21st July, 2008

BMW and Fiat confirmed earlier this month that both companies were investigating the possibility of co-operation in the areas of components and architectures for their respective Mini and Alfa Romeo vehicles, as well as the sharing of dealerships and service centers in North America. BMW is expected to use one of Fiat’s new small car platforms for its third-generation Mini family, while Fiat is expected to benefit by utilizing Mini’s established North American dealer network for its US re-launch planned for next year.

According to supplier sources, Fiat’s new C-Evo platform could eventually be used for a larger Mini model that would debut around 2015. The new platform will first be used in the replacement for the Alfa Romeo 147, and can be matched with both FWD and AWD powertrains. Speaking with Automotive News, the supplier sources said BMW and Fiat were investigating using Fiat components, including its future B-platform, for the Mini Mark III, which is due in 2012 or 2013. The same B-platform will also be used for the successors to the Fiat Grande Punto and Alfa Romeo Mi.To.

In addition to platform sharing, both companies also plan to develop a new compact family of petrol and diesel engines ranging from about 1.2 to 1.6-litres in displacement.

Mini: Prices will rise as inventory dwindles
Richard Truett, Automotive News 22nd July, 2008

Sales of the red-hot Mini Cooper will fade this summer, no matter how high fuel prices rise. Jim McDowell, vice president of BMW’s Mini division, told reporters here today that the nation’s 82 dealers are out of cars and will be selling mostly preordered units for the rest of the year because demand has outstripped supply.

“For the last three months, we were selling from inventory. There’s no way [July] can be as good,” McDowell said. He said dealers have a one-day supply of cars and that 81 percent of the cars delivered this month have been those that consumers have configured and ordered. In June, Mini sold 5211 units, up 24.8 percent from the same month last year. That followed sales increases of 52.8 percent in May and 39.4 percent in April.

Through the first half of the year, Mini sales are up 33.6 percent to 26,400 units. Dealers who have been asking for more cars won’t get much satisfaction soon. Mini will boost production for the United States but only by between 2000 and 3000 cars for this calendar year. The bump in production is the result of the current Mini convertible ending production July 31. BMW is switching the convertible to a new body. The convertible will resume production next spring, said BMW spokesman Thomas Salkowsky.

The Mini plant in Oxford, England, is running three shifts, seven days a week and builds about 800 cars a day for 80 markets.

In other Mini news:

• McDowell said Mini plans to expand its dealership network by 13 stores for a total of 95 by 2011. He said there are some regions of the country where dealers are far apart to service customers.
• Base prices for some 2009 models will increase, but one previously optional safety feature, dynamic stability control, will be made standard on all models. The Mini Cooper hardtop goes from $18,700 to $19,200, while the Cooper S hardtop price rises from $21,850 to $22,600; Cooper Clubman and Clubman S models get a $250 price increase to $20,850. All prices include shipping.
• The diesel-powered Mini is being studied for the United States, but it won’t be offered here until it can be sold in all 50 states, McDowell said. He did not give a model year when the diesel Mini could be available in the United States.
• It’s possible the Mini could be built in lower-cost countries. Says McDowell: “As Mini continues to expand, we should be mindful of where Minis are built and should have some currency diversification.”

4) India Watch

Nano to run on FEV’s diesel engine
Nandini Sen Gupta, ET Bureau, Economic Times 14th July, 2008

Tata Motors will strap on a diesel engine developed by German powertrain maker FEV on the soon-to-debut Nano. According to sources in the auto industry, the small diesel engine will have fuel injection systems developed by Bosch, but the rest of the platform is being developed by Tata Motors and FEV. FEV is an independent engine and powertrain systems research, design and development company, headquartered in Aachen, Germany. The Nano engine is not its only connection with India. M&M is also working with FEV for its electric-diesel hybrid Scorpio.

Although Tata Motors has so far only showcased its petrol Nano — kitted with a 623 cc, two-cylinder, MPFI engine with four-speed manual transmission — it has already announced a diesel and even a hybrid are in the pipeline. At its premiere in the Auto Expo earlier this year, Tata Motors chairman Ratan Tata had said: “By and large we’ve always been a diesel company so we will have a diesel version that will follow this variant soon after.”

According to sources in the auto industry, the car will sport the world’s first 800 cc, turbo charged, CRDi diesel engine. The diesel powertrain Nano will probably roll out in 2009. While Bosch is working on the CRDi system for the Nano, Honeywell Turbo India is working on the turbo charger. When contacted a Tata Motors spokesperson refused to comment.

Sources say the 800 cc, turbo charged, CRDi diesel engine will be two-cylinder and crank out at least 30% more mileage compared to 800 cc petrol cars. Given that the smallest diesel engine in India right now is the 1.3 litre Fiat multijet CRDi engine that Suzuki has strapped on to the Swift and both Tata and Fiat will use in its future models, the Rs 1 lakh car will offer at least 40% better fuel efficiency than any small diesel currently available.

The turbo-charged CRDi diesel engine on the Nano would mean that it won’t be an unsophisticated ‘naturally aspirated’ engine like earlier cheaper diesels in India. In technology and sophistication terms it will be no less than the Swift diesel or the Getz diesel or even the Fiesta, Fusion, Verna, Logan and other new generation diesel models currently available.

Though popular earlier, naturally aspirated diesels are now virtually extinct in India. Because they are not Euro 4 compatible which will be the mandated emission norm by 2010, companies have been replacing naturally aspirated diesels with turbo charged CRDi diesel engines.

Posted in: AROnline News
Keith Adams

About the Author:

Created in 2001 and watched it steadily grow into AROnline. Is the Editor of Classic Car Weekly, and has contributed to various motoring titles including Octane, Evo, Honest John, CAR magazine, Autocar, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, Classic Car Weekly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, and the the Motoring Independent... Likes 'conditionally challenged' motors and taking them on unfeasable adventures all across Europe.

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