News : April 2007
LDV in profit by June, say new Russian owners
By John Reed, FT.com
Going for leadership of the UK minibus market, LDV’s future’s looking bright…
LDV’s new Russian owners say they expect the Birmingham-based commercial vehicle producer to return to profitability in June for the first time in several years. Gaz, the Russian car company, claims to have almost doubled production and created 75 new jobs at LDV since acquiring it for an estimated £50m-£100m last year. It will begin importing Maxus-vans and variants from Birmingham to its plant in Nizhny Novgorod, Russia, in a few months, officials at the Russian company told the Financial Times yesterday.
Peter Zolotarev, Gaz’s chairman, said: “By the end of August we will start importing cars from the UK. We plan to sell about 2000 vehicles [in Russia] by the end of the year.” The company is already road-testing the vehicles in Russia, where they will be adapted for the local market. Gaz will move from imports of LDV-made vans to assembly from completely knocked down kits in Russia next year, Mr Zolotarev said.
The Maxus competes with Ford Motor’s popular Transit van. LDV produced just under 7000 vehicles in total last year, mostly for the UK market. Gaz’s purchase of LDV from buy-out firm Sun Capital Partners last year marked a milestone for the UK’s auto industry, as it was one of the sector’s last producers controlled by UK investors. The company, one of Russia’s largest domestic producers, is controlled by Oleg Deripaska, the Russian aluminium tycoon.
Britain’s motor industry is controlled almost entirely by foreign companies, from Toyota and Nissan to Ford Motor and General Motors. China’s Nanjing Automobile corporation, which bought the manufacturing assets of the MG brand from bankrupt MG Rover in 2005, is due to begin producing MG TF sports cars at its Longbridge plant by early June. Russia’s vehicle market is one of the fastest-growing. Gaz is also developing dealerships in Scandinavia, France, Malaysia, and Benelux. “It’s very important for the company not to be focused on the domestic UK market, but to grow outside,” Mr Zolotarev said.
Separately, Gaz’s chairman denied reports that his company had any interest in buying Chrysler, the lossmaking US unit that DaimlerChrysler, its parent group, is selling. “Acquiring Chrysler was never part of our strategy,” he said. “We are open for partnerships [but] to acquire Chrysler is not our plan.” Gaz recently bought equipment from the unit to produce Chrysler Sebring and Dodge Stratus cars.
Raising the dead: The Shanghai motor show saw the reappearance of the MG ZS – we wonder what Honda makes of it?
A LOT has been made of MG’s Chinese revival tour. At the Shanghai show, MG-producer Nanjing MG Motor Company played up the British angle at every turn, right down to using proper gentlemen and ladies as models on its show stand. The only thing missing was a spot of tea and some crumpets. After seeing the MG TF run around the web in highly photoshopped images for the past couple of months, it was cool to finally see the real roadster in the sheetmetal. Let’s just say that at this point, Mazda, GM and any other automaker that produces roadsters has nothing to fear – yet.
The TF is not ready for North American prime time, and it showed. It seemed like it was made out of tin and the top wasn’t exactly top-notch. The 1.8-litre engine tucked behind the seats, which Nanjing claims is good for 134bhp and 121lb/ft of torque, looked a little raggy. Wait, maybe they do have this British motor car thing down after all! But like so many of the cars at Shanghai, you see the potential. And unlike so many of the Chinese automakers, Nanjing doesn’t have to copy other designs, since it already bought them. This way, they can focus on making the cars better instead of worrying about design, and they likely will. We’re all for mid-engine roadsters, and the TF, if it makes it to the US, would be a welcome addition, warts and all.
In addition to the TF, Nanjing also showed off its MG 7 and MG 5 models, also based on former British designs. I liked the looks of the MG 5 (pictured), which is powered by a 2.0-litre diesel. The model draped on the sporty blue machine wasn’t too bad, either.
There’s another British Chinese brand in town, Roewe. Shanghai Automotive Industry Corporation, which produces the cars, wasn’t able to secure Rover naming rights, but it was able to secure engineering rights to the Rover 75, so Roewe it is. SAIC put an impressive amount effort into pushing the brand, draping a huge building across from the convention center with a Roewe banner. The badge has a distinctly Roveresque look to it — as does the Roewe 750.
And, you guessed it, Roewe also had an all-England theme going, with English Leather looking dudes and Chinese models in riding outfits. Wonder if they can get David Beckham to shill for them? Roewe showed a hybrid model of the car, as well as a solid looking concept called the W2 (pictured, cool guy is optional). It’ll be interesting to see if there’s a market for two British-themed brands in China. Judging by the size of Shanghai alone, I bet they’ll be room for both in the near future. Let’s just hope they don’t get that the reputation for quality, or lack thereof, that English motoring brands had back in the day.
Roewe’s W2 is all-intents-and-purposes, the long anticipated 450 model. (Pics: Windingroad/Motor Trend)
Shanghai Automotive sets out brand plan
By Geoff Dyer and John Reed, FT.com
Shanghai Automotive Industrial Corporation said Thursday it planned to develop five new classes of car over the next five years, the boldest statement yet by the Chinese company about its plans for its own-brand vehicles. Hu Maoyan, chairman of the company, said the group would establish five new car platforms – industry jargon for the manufacturing facilities needed for different types of models – in the mid-to-high-end, middle, SUV, compact and mini categories. The move would give SAIC a full range of product offerings.
SAIC, which is China’s largest car-maker through its joint ventures with Volkswagen and General Motors, last month began selling its first own-brand vehicle, the “Roewe” sedan based on the Rover 75 designs it acquired in 2005. Although the company has said in the past that it wished to launch further models, rival industry executives had speculated that SAIC would concentrate on its Roewe models in the near future.
However, Mr Hu’s comments indicate the company intends to move quickly to establish a broad range of car brands for sale in the Chinese market. “There had been some scepticism about their plans as people had started to wonder if they really would follow through,” said Michael Dunne, managing director of consultancy JD Power in China.
Mr Dunne said that the Roewe’s performance in its first few weeks on the market, when sales reached about 7,000, was a good start. But he added that as the car was based on a relatively old model, SAIC would have to quickly upgrade the design and engineering. Mr Hu said Wednesday that SAIC was willing to co-operate with Nanjing Automobile Corporation, the Chinese company that bought the assets of the UK’s MG Rover when it went into liquidation.
“We look forward to co-operating with Nanjing Auto,” he said. “We need to use state assets more efficiently and effectively.”
Mr Hu would not elaborate on his comments, and it was unclear if he was indicating a willingness to work together on vehicle development or if he was simply being diplomatic after a recent series of stories in the Chinese media about tensions between the companies.
Nanjing Auto has regularly been thought of as an acquisition target for larger rivals such as SAIC or Chery, but the company surprised the industry with the Rover acquisition and is going ahead with its own product launches based on Rover and MG models. SAIC has said in the past that it would monitor Nanjing’s models closely to see if they use any intellectual property it believes it owns. Earlier this year, SAIC took control of an engineering centre in the UK it established with Ricardo, the engineering consultancy. With a staff of around 150, many of them former Rover engineers, the centre will help with SAIC’s product development plans.
At China’s annual auto show, which starts in Shanghai this weekend, SAIC will show a car which uses fuel-cells developed by the group and which will carry the “Shanghai” brand name.
MG to boost Longbridge production
By John Reed, Peter Marsh and Lifen Zhangin London
Nanjing Automobile Corporation, the Chinese auto company, plans to restore production of the iconic MG TF sports car and other models at Longbridge, near Birmingham, to about 50,000 within two years.
The company, which began producing MG cars in its home city last month, also plans to develop a new, “very good sports car that would fit in with the brand” by 2009, according to its top executive in the UK. “Within two years we would like to get our market share back, and get good products with a UK focus,” Wang Hongbiao, chairman of NAC (UK) told the Financial Times in an interview. The brand, which NAC bought from MG Rover’s administrators in 2005, sold 44,337 cars in 2004 and 54,306 in 2003.
Production at Longbridge will resume in late May or early June and reach the “lower thousands” this year, and about 25,000 in 2008. Employment could reach 500-800 by the end of next year, against 140 now. NAC has invested about $500m (£250m) in the MG project to date, including in its Nanjing plant, which has the capacity to produce 200,000 cars. Longbridge will source some parts from China for its UK-made MGs, including engines and gearboxes.
Mr Wang also said a plan to license assembly of MG cars in Ardmore, Oklahoma, was “going very well”, although NAC had not yet signed an agreement. The company’s relaunch of MG marks the first takeover by an emerging Chinese carmaker of an established western brand and its manufacturing assets. Shanghai Auto or SAIC, NAC’s regional rival, bought South Korean car producer Ssangyong in 2005.
Founded in 1947, NAC produced China’s first-ever light truck, during the Great Leap Forward, Mao Zedong’s drive in the late 1950s to “catch up with the British and overtake the US”. MG will face tough competition in the high-performance car segment, dominated by more experienced companies such as BMW and Volkswagen’s Audi marque. MG’s Chinese owners are looking to reassemble a network of 50 UK dealers.
In China, NAC has lagged behind competitors such as SAIC, which bought rights to former Rover models after MG Rover’s collapse. NAC’s main joint venture partner, Italy’s Fiat, has underperformed other foreign carmakers in the Chinese market. In China, Mr Wang said MG was considering replacing the MG TF’s soft top with a hard top to take into account weather and pollution. “We are taking traditions from the British, and positioning it as a Chinese model,” he said.
More images of Roewe’s son-of-RDX60 emerge…
Conservative profile will fit in well on the Chinese market
Roewe’s baby brother to the 75-based 750 saloon is getting closer to production, as test mules are appearing all over the world on endurance runs. These images of the proposed 450 saloon, were sent to austin-rover.co.uk by eagle-eyed reader, Hans Gruter – and they clearly show the close relationship between this car, and the last RDX60 proposals, as penned by Peter Stevens on the eve of MGR’s fall into administration in April 2005.
Although there’s little linking this car stylistically with the outgoing Rovers and MGs, the similarity to the ill-fated RDX60 is quite startling, indicating that the project was continued by Ricardo2010, almost seamlessly from the closure of MG Rover – indicating the earnestness of the company’s statement back in 2005, that the RDX60 was most definitely theirs…
As with the RDX60, the Roewe 450 is based upon the architecture of the Rover 75 – and because of that, it’s heading for production at an unprecedented rate. Unlike the original MG Rover, car, Roewe’s 450 will only be offered in saloon form, and will feature a pretty new interior that echoes the changing face of the original project, and how the MG and Rover marques were going to be modernised.
A launch is expected late this year, with a European on-sale date sometime in 2009.
A very familiar looking interior…
Nanjing reports dealer progress
MG owner Nanjing is preparing to take on its first ten dealers and will release its dealer prospectus next week. Nanjing’s sales and franchising manager Stephen Cox described dealer recruitment as “going brilliantly well.”
“We have verbal agreements from the first ten dealers, and taken the opportunity to talk to some ex-MG-Rover dealers. They see the prospect of making money from the cars,” said Cox. He said seven pre-production MG TFs had been built at Longbridge last month with a further twenty to follow in April, with components such as the K-Series engine brought in from China.
UK sales are unlikely before the autumn. Despite the upbeat talk, ex-MG Rover dealers are reacting cautiously to MG’s planned return, with many expressing concerns about the age of the MG-badged cars.
“Any franchise has to be judged on the proposition and potential and that’s the big unknown here,” said the dealer principle of a former franchise in the Midlands. “They’re not new cars and they have to be looked at in that context.” A Yorkshire-based dealer principle, whose franchise has connections with MG dating back to 1924, said he was “interested but very wary.”
“Having said that, MG has the heritage, and with sport cars they can still generate interest. I think saloon cars will need to be more sophisticated. We’re not rushing headlong into anything. I think saloon cars will need to be more sophisticated”
Chris Voller of Sussex-based Crawley Down described the TF as “old at the death,” but described the list of parts suppliers secured by Nanjing as ‘impressive,’ and said this gave him confidence. “I’d say the jury’s still out at the moment, but MG as a brand can survive, and I think it could work,” he said, adding that the internationalisation of the car industry meant buyer resistance to Chinese ownership was unlikely to be a problem.
He said an MG-badged cabriolet 2+2 would be a big seller.
A MINI milestone
Reason to be proud…
Six years after the start of series production, the one millionth MINI has rolled off the production line at Plant Oxford. This represents another milestone in the car’s history and highlights the continuing success story as rising global demand for the British-built car heads for new production and sales records.
MINI UK will see its biggest monthly sales record since the car went on sale in July 2001. Preliminary figures indicate 7854 sales in March. The previous record month was in March 2006 with 7687 sales. The new record signals the successful launch of the second-generation MINI Cooper and MINI Cooper S in November 2006 and orders are strong for the forthcoming MINI One and MINI Cooper D (on sale from 14 April). 2007 also sees the launch of the new MINI Clubman. This will be the third model in the increasing MINI range, joining the Hatch and Convertible.
Since its launch MINI has defined a new market segment – the premium small car with a worldwide presence and a comprehensive range of customisation options. From Chile to China, MINI is enjoying growing popularity among customers across 80 markets around the world. Almost 80 per cent of MINIs, which are all built to individual customer orders, are currently produced for export. While initial forecasts suggested a market for 100,000 units per year, sales have totalled more than double that figure reaching a record of 200,428 units in 2005.
Developments at Plant Oxford have reflected MINI’s success. In 2001 some 2400 associates worked in single shift operations to build up to 300 cars a day. Today more than 4700 associates work 24/7 to produce as many as 700 MINIs per day. During the same period maximum production capacity for the plant has risen from 100,000 to over 200,000 units per year, and in the medium term, annual capacity is planned to reach 240,000 units. In total BMW Group has invested £380 million into Plant Oxford since 2000 to increase production capacity and to prepare for new MINI derivatives.
With the launch of the second generation MINI towards the end of 2006, the MINI Production Triangle was formed as the UK plants Hams Hall and Swindon became an integral part of MINI production. Hams Hall, near Birmingham, supplies petrol engines and Swindon supplies pressings and sub-assemblies to Plant Oxford. Together they bring the total number of MINI production associates in the UK up to 6800.
Another area in which MINI has continued to develop is in the efficient use of natural resources in the car’s production. Since the first full year of production in 2002, Plant Oxford’s energy consumption and CO2 emissions have both gone down by 20 per cent, while water consumption has dropped by more than 30 per cent per unit. In addition, more than 25 different waste materials from production are recycled.
Like all MINIs, the one millionth car was produced to customer order. In this case the ‘customer’ is BMW Group’s heritage division, Mobile Tradition. The colour of the landmark MINI Cooper S is Pepper White with a specially-developed paint for the roof, Almond Green, accentuated by a ‘million’ graphic extending onto the bonnet. The interior matches the roof with leather seats, steering wheel and gearknob all in Almond Green leather.