By 28 December 2007 0 Comments Read More →

News : December 2007

Longbridge up for redevelopment…

KEITH ADAMS


Picture: Richard Porter

THE days of volume car production at the former MG Rover site in Longbridge, Birmingham, are well and truly over – and although SAIC and NAC have confirmed their continued commitment to the site, this will take the form of specialist sportscar production and research and development. However, plans are afoot from local developers to re-inject the area with life, claiming that new retail developments will create 10,000 jobs at the historic site.

This compares positively with the 6000 jobs lost at Longbridge when MG Rover went into administration in April 2005, although it is clear that the new vacancies created will not be in the manufacturing sector. Under new proposals the site will become a thriving development of shops, offices and residential properties – and is expected to attract fresh inward investment into the area.

In addition, government ministers have already outlined plans for a £20m innovation centre in the area, which will make up part of that redevelopment. The plans are being put together by Birmingham City Council, Worcestershire County Council and Bromsgrove Council.

If the proposals are given the go-ahead, the scheme could cost a total of up to £500m – and they include a shopping complex, 1500 new homes and a revamped railway station. Bournville College could also relocate to the once-industrial plot. However, most interesting for AROnline readers is the possibility of an Austin Heritage Centre, which we’re assuming would be housed in one of Q-Gate’s more iconic buildings – and offer a home to Lord Austin’s preserved office.

A Birmingham City Council spokesman said the plans could cost ‘in the region of £500m’, but a large proportion of that cost would be met by private investors. The improvement scheme was announced by Birmingham City Council leader Mike Whitby, Councillor George Lord, leader of Worcestershire County Council, and Councillor Roger Hollingworth, leader of Bromsgrove Council.

The three have launched a ‘Longbridge Area Action Plan’, set to span 15-years.

Cllr Lord told the media: ‘Longbridge is not only the biggest regeneration project in the Midlands, but one of the most important, the eyes of both our residents and the nation will be on us, so we are determined to succeed.’

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SAIC and Nanjing finally sign…

SHANGHAI DAILY


Left to right: Yu Jianwey, Chen Hong, Hu Maoyuan, Wang Haoliang

SHANGHAI Automotive Industry Corp (Group) today signed a deal to buy Nanjing Automobile Group Corp’s auto-assembly and component-making businesses and become China’s biggest auto maker. SAIC Motor Corp, the listed unit of Shanghai Auto, gave 320 million shares of SAIC Motor to buy the assets, 4.88 per cent of the whole shares of SAIC, the two companies said in a signing ceremony in the Great Hall of the People in Beijing.

The shares are now worth 2.1 billion yuan (£143m). The duo also agreed to set up a joint venture to oversee other businesses of Nanjing Auto, including services, trade and assets, the two companies said in a statement. Nanjing Auto will own 25 percent of the joint venture Dong Hua Co, according to the statement.

‘Both sides will complement each other as well as share their resources in terms of funding, research and development, marketing, manufacturing and procurement,” the statement said. The deal will boost the combined sales of Shanghai Auto and Nanjing to more than two million vehicles by 2010 and make the companies more competitive, Bloomberg News Service cited Fitch Ratings Ltd as saying.

Shanghai Auto has 17.44 percent of the Chinese auto market. Nanjing Auto, the country’s oldest car maker, also makes Soyat compacts and has a venture with Fiat SpA. SAIC Motor Corp, which has all the auto-related assets of parent Shanghai Auto, boosted profit fourfold in the third quarter after it bought stakes in ventures that assemble vehicles with Volkswagen and General Motors Corp.

China’s government has asked auto makers to combine into larger companies that can compete with overseas rivals such as Toyota Motor Corp and Volkswagen AG. China, the world’s third-largest vehicle producer, has 47 car makers including foreign companies operating plants in the country, compared with 15 in the United States.


UK Press Release:

Both SAIC and Yuejin Motor, the parent company of Nanjing Automobile Corporation (NAC) have confirmed the integrated co-operation between each other after five months’ delicate planning.

On 26th December 2007 Mr. Hu Maoyuan, Chairman of SAIC and Mr. Wang Haoliang, Chairman of Yuejin signed a cooperation agreement at the People’s Congress Hall in Beijing. Also present were Mr. Zeng peiyan, China’s Vice Prime Minister, leaders from the National Development & Reform Commission, Shanghai municipal government, Jiangsu province and Nanjing municipal government as well as the top management teams of SAIC and NAC and principals from China’s leading automakers.

According to the cooperation agreement, automotive businesses of NAC will be fully integrated into SAIC. Within the business units of NAC, complete vehicle and first-tied parts business will be integrated into SAIC Motor, a public listed company largely held by SAIC, and other business, related to components, service and trading will be within a newly established joint venture, Donghua Company.

After the merger of the two companies, business planning, R&D, sales and marketing, manufacturing and supply chain management will be fully integrated, contributing towards synergy and better performance throughout home and overseas markets. The long term objective of the cooperation is to build SAIC into China’s largest automaker with global competitiveness while NAC into a leading manufacturing base in China.

The comprehensive co-operation sets up a benchmark for the optimization and restructuring of Chinese automotive industry. It will improve industrial concentration and benefit the utilization of industrial resources. It will also accelerate the development of independent R&D and innovation capability as well as international competitiveness of Chinese auto industry.

The co-operation is fully supported by China’s central government and the respective local governments of Shanghai, Jiangsu province and City of Nanjing.

The co-operation will strengthen the functions of R&D, sales and marketing and manufacturing at Longbridge. The UK business is vital for SAIC to enhance its multinational operations competence. Following the integration there will be a further input of resources into Longbridge. With the TF being the first product launched, it will be followed by other new MG products.

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Ford to tell Jag and Land Rover workers first

Birmingham Post, Dec 21 2007

Indian industrial giant Tata will be named as the preferred bidder for Jaguar and Land Rover on Friday. The group has had its £1bn bid accepted by Ford, which is selling the luxury carmakers which together employ 13,000 people across the Midlands.

The firm has beaten off competition from rival Indian firm Mahindra and Mahindra and private equity group One Equity Partners. Final details are expected to be tied up in the next six weeks before the sale is completed. Sources at Land Rover said: ‘It is definitely Tata. There is one final meeting and so long as there is no last minute hitches, which are not expected, then an announcement will be made on Friday.’

Officials are coming to the UK from India for the announcement. Staff and the government are all supportive of the deal, the source added, while it will ensure the companies and the jobs stay in the West Midlands. The deal was welcomed by union leaders. Des Quinn, industry officer for the Transport and General Workers’ Union section of Unite, said: ‘We cautiously welcome this development, although the devil will be in the detail. We think the Tata bid is in the best interests of our members. They come from a manufacturing background, and the experience of other people they have taken over has been good.

‘They allow the management to manage and are investing in it. They are cash rich and they can afford the price, as well as invest in the future. Generally we think they are the better buyer for Jaguar and Land Rover.’ Tata bought steelmaker Corus for £4.3bn last year, while the firm also owns Tetley Tea in the UK. Mr Quinn added that the Mahindra bid fell down becasue of its links to private equity – with the Indian firm working with Apollo.

‘When a private equity firm buys a company, the cost of buying it often goes onto the company’s books. If anything then goes wrong how, do you refinance the business?’

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Ford chooses Tata for Jaguar and Land Rover

By John Duckers and John Revill,
Birmingham Post, Dec 19 2007

Indian industrial giant Tata will be named as the preferred bidder for Jaguar and Land Rover on Friday. The group has had its £1bn bid accepted by Ford, which is selling the luxury carmakers which together employ 13,000 people across the Midlands.

The firm has beaten off competition from rival Indian firm Mahindra and Mahindra and private equity group One Equity Partners. Final details are expected to be tied up in the next six weeks before the sale is completed. Sources at Land Rover said: ‘It is definitely Tata. There is one final meeting and so long as there is no last minute hitches, which are not expected, then an announcement will be made on Friday.’

Officials are coming to the UK from India for the announcement. Staff and the government are all supportive of the deal, the source added, while it will ensure the companies and the jobs stay in the West Midlands. The deal was welcomed by union leaders. Des Quinn, industry officer for the Transport and General Workers’ Union section of Unite, said: ‘We cautiously welcome this development, although the devil will be in the detail. We think the Tata bid is in the best interests of our members. They come from a manufacturing background, and the experience of other people they have taken over has been good.

‘They allow the management to manage and are investing in it. They are cash rich and they can afford the price, as well as invest in the future. Generally we think they are the better buyer for Jaguar and Land Rover.’ Tata bought steelmaker Corus for £4.3bn last year, while the firm also owns Tetley Tea in the UK. Mr Quinn added that the Mahindra bid fell down becasue of its links to private equity – with the Indian firm working with Apollo.

‘When a private equity firm buys a company, the cost of buying it often goes onto the company’s books. If anything then goes wrong how, do you refinance the business?’

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Automotive PR Limited: Managing Director Hayes’ take on China.

CLIVE GOLDTHORP

AROnline’s regular readers are probably already aware that NAC MG UK Limited appointed Automotive PR Limited (APR) as the company’s global Public Relations Consultants. However, APR’s client companies include the likes of AP Racing, Bosch, Chevrolet, Continental Tyres, Corus, JATO Dynamics, Motorpoint and Stadco so we reckoned that the company merited a closer look!

APR was founded by current MD, Martin Hayes, in 2000. Hayes has more than thirty years’ experience in Automotive Industry communications, first as a truck and bus journalist and later as Head of Public Affairs for Leyland Truck and Bus, Midland Bank International and DAF Trucks. Hayes now aims to move his company into the Chinese and Indian automotive sectors.

AROnline shares APR’s interest in what are widely recognised as the two most significant emerging markets and so we were particularly keen to hear Martin Hayes’ take on the current ‘era of ferment’ phase of the Chinese Automobile Industry’s development.

Martin Hayes has, in fact, recently returned from a visit to China where he gave a comprehensive interview to Zhuo Chen of the People’s Daily. AROnline has, with APR’s permission, been given access to the following ‘full English’ translation.

How did you get into automotive PR?
When I was at school I always had two passions – cars and writing – so I guess it was not surprising that my first job was as a motor industry journalist. But I couldn’t find a job writing about cars so I started on a paper aimed at truck operators. That led to a job working for the then Leyland Truck and Bus company as a PR man and later to my role as Communications Director of DAF Trucks in the UK. I became a PR consultant in 1993 and founded the company Automotive PR in 2000.

Britain has already become a post-industrial society. What do you think of the prospects of its auto industry?
The British motor industry is actually in surprisingly good shape! We are producing record numbers of cars – in the assembly plants of companies such as Nissan, Honda, Toyota and BMW Mini. Although British owned makers have largely disappeared, its highly significant that much of the research and development of major international makers is conducted here, and nearly all of the Formula 1 teams have bases in the UK. That is because the innovative quality of our engineers and designers is something which is recognised across the world. Of course our heritage of brands is highly important in global terms – think of Rolls Royce, Jaguar, Aston Martin, Bentley and all the others – even MG and Rover proved very exciting for two Chinese makers!

What do you think of the Chinese auto industry?
Its hugely exciting at present – but with massive consolidation yet to come. Our non-executive director, the respected academic Professor Garel Rhys, compares the Chinese auto industry now with the US industry in the early years of the 20th Century. There, in those first days of the car, there were more than 200 makers – just like in China now. Within a decade or two, those had dropped to just five or six major players and the same will undoubtedly happen in China.

PR is still an embryonic industry in China. What do you make of it?
There are huge cultural differences between the way the media operates in China and in the West. This is in part due to the different political systems and means that PR is a completely different philosophy. Here in Europe, our role as PR professionals is to seek to persuade and inform customers via a completely independent media which has no allegiances to individual makers or industries.

APR is the global PR agency of NAC MG. What is the main challenge in working with Chinese clients like NAC MG?
It is really about developing mutual understanding for the way our two cultures work. We’ve had a lot to do with NAC MG to help them understand how the western media works and what will and will not be acceptable and successful in gaining good coverage for their affairs. NAC MG is unique in that it is the only Chinese motor manufacturer to own a truly international brand and we’ve been helping them assimilate and exploit the value of MG’s ‘Britishness’ for Chinese consumers.

What can APR bring to Chinese clients?
Put simply, effective access to the Western media. We are actively seeking to win more clients in the Chinese motor industry. The only way they can be fully successful on the global stage is to gain positive exposure for the strengths of their brand and products in the media that matters to them – often the key trade and specialist publications which reach their customers and end users. As with NAC MG, there is a huge learning curve to go through but we can help with that, both by being their ‘eyes and ears’ on the world and also by developing the messages which will work in the West. We now have a full time Mandarin speaker on our team here in London and a representative based in Shanghai – so we are well positioned to help Chinese motor companies raise their profile where they need it: internationally

There have been in the Western media plenty of negative news stories on China-made goods. How can APR help Chinese clients establish positive images in the West?
‘Made in China’ should be a badge of quality but – for a whole variety of reasons – that is not always the perception of consumers. Partly its due to the huge success of Chinese manufacturing industry – half the world’s manufactured goods now come from China. But its also due to some very well publicised cases of corner cutting – where quality has been sacrificed for short term gain. The Chinese authorities need to get tough with companies which let them down – the impact of their penny pinching will be felt by all Chinese companies.

In the motor industry, below-standard products could have really serious consequences. Already one manufacturer has had to withdraw cars from the European market because they failed to meet safety critical crash standards and this has had a real impact on public attitudes to Chinese-built vehicles. This has to be got right – and quickly! We at APR can help to gain maximum beneficial publicity for good products – but we can’t persuade the world that a below standard car is good.

There have been in the US some recalls of China-made goods this year. To Chinese manufacturers, what is your suggestion in terms of crisis management?
I think the Chinese Government needs to do more to support its own ‘Made in China’ brand. I know from my visits to China that there is a real emphasis on quality and R and D, certainly at NAC MG, but this doesn’t always come over outside the country. Our solution is straightforward – bring to China the key journalists in the motor sector and let them see for themselves. One small party of UK motoring journalists who visited the NAC MG plant in Nanjing went away so impressed that they produced the best coverage on the company and its products that it has ever received. Seeing is believing!

In terms of crisis management, then there are some key watchwords – openness, speed and apology. None of those are easy – and for many Chinese management teams they really are ‘foreign’. But we can help them understand what is required and explain why the problem has been put right and will not reoccur.

Though China is the world’s third largest manufacturing country, it has few brands well-known in the West. What is your suggestion for Chinese clients to establish well-known brands in the world?
Before they can do that they have to understand what makes a brand. The essence of that is complex and covers a whole variety of factors – from products to plants, and from people to culture. An agency such as Automotive PR can advise on all aspects of the process and guide Chinese companies through the most cost-effective route to building a successful, international brand. Its not all about big money advertising or public statements – and it can’t be done overnight! It requires a long term commitment to an open communications programme which, through greater knowledge and understanding of the products and capabilities, builds trust, familiarity and – ultimately – a wish to buy.

As a trans-national firm, are you going to further expand your business in China? And How? Are you thinking of a joint venture or sole proprietorship?
We certainly want to! We are currently looking at all the methods, but are certain that an approach which combines the strength in depth of our team – all of us are fully experienced in motor industry communications – with local knowledge, will be the best route. We already have Chinese team members and the next logical step would be for us to locate a full time, qualified and experienced PR person in China. That will come as soon as we have the business to justify it.

How do you help clients decide what their significant messages are? If they do not agree with you, what do you do?
This is a process of mutual exploration and understanding which takes time to evolve. We can look at our customers businesses and products through the eyes of Western journalists – several of us were journalists earlier in our careers – and determine what will be of interest, what will not and what is best avoided. We can only guide, advise and research – but clients have to take their own decision, and stand by the consequences of them!

Do you work for head-on competitors? If so, how do you deal with client conflicts?
As we expand, this is an ever increasing issue but we have always found that we can find a way in which almost all such apparent ‘conflicts’ can be overcome by being completely open and transparent. For example, in the past year we have worked for three car makers – NAC MG, Mercedes and Chevrolet. All have been aware of our relationship with the others but all have been comfortable either because they occupy a different ‘niche’ or we have used different teams to handle their business. We believe that we can use this approach to keep on growing and – in fact – there are many areas of the motor industry where we have yet to win clients.

Are you planning to further expand your business in emerging markets like Russia and India?
Definitely! All the reasons which make us have a strong appeal to vehicle and component makers in China also work in those countries too. We currently have a Russian intern on our team and one of our colleagues has just returned from an exploratory trip to India – so we are in a research phase at present.

Your experience was not limited within automotive PR at all, as you used to be Head of Midland Bank International apart from being PR Director of Leyland Truck and Bus and DAF Trucks. Do you have any plan to extend your business to financial PR as well?
No! We believe that our complete concentration on the automotive sector is the reason for our success and we have no plans to dilute our focus. There are large numbers of financial and generalist PR agencies but very few who understand – and live and breathe – the motor industry like we do at Automotive PR. My brief switch of careers – for just a year 20 years ago – was not happy. I’m a motor man, through and through!

What do you do in your spare time? Any hobby?
As I said, I – like my colleagues – live and breathe the motor business so there’s not a lot of spare time. But when I can I like to cook and read – and, of course, to travel.

AROnline believes that nearly all of the nascent Chinese OEMs are potential APR clients but reckons that the company’s real challenge may well be identifying which of the many current players in China will survive the ‘era of ferment’…

(Editor’s Note: AROnline wishes to acknowledge Martin Hayes’ cooperation in the preparation of this article. More information about APR can be found at: www.automotivepr.com).

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Tata bids £1 billion for Jaguar, Land Rover

REUTERS [19 December]

India’s Tata Motors has offered £1.03bn for Ford’s Jaguar and Land Rover brands, according to a Press Trust of India report carried in local newspapers today. A Tata Group spokesman declined comment on the report.

The report, quoting sources close to the development, said rival Indian car firm Mahindra & Mahindra had offered £950m. A person close to the matter told Reuters this week that Tata Motors was most likely to become preferred bidder in the talks with Ford, as it has the backing of the UK-based brands’ unions and was viewed as a long-term owner that would invest in the units.

Ford is expected to choose a frontrunner to buy the brands around the end of this week.

India’s Tata Group has led the M&A drive of Indian corporations which have global ambitions and are seeking new markets, brands and technology. The group’s major acquisitions include Tata Steel’s £6.5bn purchase of Corus this year and Tata Tea’s acquisition of Tetley in 2000.

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FAQs: Land Rover LRX Concept

KEITH ADAMS


Land Rover’s first wedge…

You may be forgiven for thinking that, in the current ecological and economic climate and with the imminent arrival of new owners, Land Rover UK’s top brass might have allowed their collective heads to drop and adopted a defensive stance. However, the appearance of the LRX concept is anything but apologetic – yes, its footprint is practically as small as a Volkswagen Golf’s, and it’s being touted as the company’s ticket to a greener future, but the hybrid 4×4, which is to get its first public unveiling at the Detroit Motor Show next month, is a jewel-encrusted premium product pitched directly at the hearts and minds of aspiring drivers.

The confident new LRX appears on the back of record company sales and profits, and represents the company’s debut in the sporting SUV market. Described by LR as a ‘Cross Coupe’, it’s tiny compared with the rest of the range. Measuring 4351mm in length and 1535mm in height, the LRX lacks the intimidating bulk that causes its larger brothers such trouble in cities. It won’t be cheap – and just as the Range Rover Sport carries a hefty premium over its platform-shared brother, the Discovery, expect to pay handsomely for the LRX in production form.

Who’s the LRX aimed at?

LR executives are understandably bullish about the LRX, and know that in order to survive in the long term, the centre of gravity of its range will need to be shifted downwards. This means that the new baby LR is a vital addition to the range – and you can bet your bottom dollar that within a couple of years, something similar looking will be rolling off the Halewood production line.

Powered by a 2-litre hybrid diesel powertrain, and featuring LR’s new electric rear axle drive, known as E-RAD, it’s easy to imagine the marketing boys pushing the LRX for all its worth. In terms of styling, the LRX is the responsibility of design director, Gerry McGovern, who was heavily involved in the original Freelander. His intended rivals aren’t the Honda CR-V or Toyota RAV-4, but lifestyle options such as MINI and Audi TT.

It’s green credentials are pretty good too – with improved aerodynamics, reduced weight and bulk, and that Hybrid powertrain, it’s going to be good news for both fuel consumption and CO2 output. It should be pretty handy off-road, too – and wouldn’t be a Land Rover if it wasn’t. The proven permanent 4×4 system augmented with Hill Descent Control and Terrain Response System mean that the LRX should be as effective, if not more so, than the Freelander 2.

The inside story


Cool blue is the order of the day in this haven of caramel and aluminium…

Just like the Range Stormer concept, the LRX has a gorgeous looking interior. Not only is it cool to look at, but there’s nothing clubby or olde-worlde about its brown leather trim. The contrast with the ultra modern aluminium detailing is stark, and yet it works extremely well… in the pictures at least. Be sure that it won’t look like this in production form, although we’d hope that the colour scheme survives partially intact.

The instrumentation is typically concept car-like with what is described as a floating LCD console that displays its messages in technicolor 3D. The display colours also change depending on the style of driving – a nice touch. The Jaguar XF pop-up cylindrical automatic gearbox selector co-developed with Apple makes a reappearance, and could well make it into the production version.

The vast acres of glass means the driver is treated to an airy interior with excellent view of the road ahead. Will that clear roof make it onto the production version? We reckon so.

When will we see the production version?

Make no mistake, a production version of this car should appear by around 2010. As to whether it will look like the concept version, that’s down to the reactions of show goers, and how the marketing men see it fitting in to the market place. Land Rover needs this car, and its new owners will be only to happy to offer something so new and appealing so early into its ownership of Land Rover.

Expect it to be toned down – and to look something like a three-door Range Rover Sport, but other than that, take a good look at your next company Land Rover…


Concept drawing reveals that LRX made the transition from paper to show star largely intact…

To see a video of the LRX in action, visit CAR Magazine Online

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News digest

Compiled by CLIVE GOLDTHORP

The Sale Of Jaguar And Land Rover

Indian firms a safer bet for Jaguar
Jonathan Walker, Birmingham Post 14th December, 2007

An Indian buyer offers a brighter and more secure future for Land Rover and Jaguar than an American private equity firm, industry experts told Parliament yesterday. MPs heard the marque’s prospects were ‘unclear’ if snapped up by private equity bidder One Equity. But a sub-continent buyer – tipped to be Tata Motors – was likely to keep them in the UK and invest.

The claims were made by Peter Cooke, professor of automotive management at Buckingham University, and Eric Wallbank, of accountants Ernst and Young. They were giving evidence to the Commons Business, Enterprise and Regulatory Reform Committee, chaired by Mid Worcestershire MP Peter Luff (Con), following Ford’s decision to sell the brands.

Indian automobile firms Tata Motors and Mahindra and Mahindra are reported to be close to submitting revised bids for the businesses which employ 15,000, mainly in Solihull and Castle Bromwich, Birmingham. One Equity is the private equity arm of JP Morgan. Professor Cooke told MPs: ‘I suspect if Tata were to acquire it, they would keep the company in the UK and look to develop it.’ India was a fast-growing economy where people were very brand conscious, which created a ‘very real opportunity’ for Jaguar, he said.

Mr Wallbank said both potential Indian buyers had ‘strong vehicle manufacturing bases’, which they would try to link up with Jaguar and Land Rover. But commenting on a private equity buyout, he warned: ‘It is unclear to me what the business model is that would enable this to work for them, as an investor.’ Both experts agreed Jaguar could have a bright future under the right owner, despite years of unprofitability. Mr Wallbank said: ‘Ford can’t afford to invest, but a new owner might have access to capital to enable them to develop the product range.’

Prof Cooke said Jaguar was right to pursue a strategy of making increasingly expensive cars for a ‘very elite sector’. He told MPs: ‘We are talking about people who buy two or three cars, because they don’t necessarily live in one country.’ The committee is expected to take evidence from Ford next year, but agreed not to do so until the sale was complete because of commercial sensitivities. Speaking in a separate Commons hearing, Mr Luff said jobs at Jaguar and Land Rover could be safer under new ownership. He said: ‘If I were an employee of Ford, Land Rover or Jaguar, I would rather be owned by a company with money to invest than a company that was losing billions.’

Solihull MP Lorely Burt added: ‘I understand Ford is selling the classic marques of Land Rover and Jaguar because elsewhere in the world it is not necessarily so successful. The company is £6 billion in debt. The company does not want those marques to be lost, it wants them to continue, but… with the greater investment needed to meet the challenges of the global market.’

Ford bought Jaguar in 1989 for £1.6bn and paid £1.7bn for Land Rover in 2000. However, it’s Premier Automotive Group, which includes the two brands, lost £166m last year.


Ford could name next Jaguar, Land Rover owner this week
Automotive News Europe/Reuters 18th December, 2007

Ford Motor Co. is set to choose a frontrunner to buy European brands Jaguar and Land Rover around the end of this week as it moves towards a sale early in 2008, said a person close to the matter on Monday. India’s Tata Motors is most likely to become preferred bidder in the talks with Ford, as it has the backing of the U.K.-based brands’ unions and is viewed as a long-term owner that will invest in the units, said the person.

Tata, Indian rival Mahindra & Mahindra and US-based private equity firm One Equity Partners emerged last month as the last bidders left in the race for Jaguar and Land Rover. Ford is spinning off the British luxury brands in order to focus on restructuring its loss-making North American operations. Union leaders at Land Rover and Jaguar’s UK factories voted late last month to support the Tata bid on the grounds the workforce’s best interests ‘would be served by finding a partner with an established presence and background in manufacturing.’

Backing from the unions, which had held meetings with all three final suitors, could be relevant for the politically-sensitive deal, as Ford would remain a major employer in the UK even after it sells the two luxury brands. The bidders have also held talks with the British government, which is keen to safeguard jobs, in recent weeks, said the person.

The winning bidder is expected to pay about £1bn for the two brands, but the cash amount has yet to be fully determined and is just one of Ford’s considerations. ‘First and foremost in our minds is to make sure that we sell to a buyer that looks to grow (the brands),’ Mark Fields, Ford’s president for the Americas, said last week.

Ford said on Monday: ‘No final decisions have been made (on a buyer) and we anticipate reaching an agreement early next year.’ The company declined to comment further on the process.


MINI


Okay, so it’s a Clubman, but you get the idea…

Mini SUV: to be called Crossman
4Car 18th December, 2007

The upcoming R60 Mini SUV is to be called Crossman, according to Mini CEO Kay Segler. The Crossman, probably more of a crossover-type vehicle than an all-out 4×4, has already been scheduled for production at Magna Steyr in Austria, with volumes of 80,000 a year planned.

The Crossman – formerly known internally as ‘Colorado’, though the ‘Monte’ name was also rumoured for a while – will be based on the next-generation Mini platform. Engineered from scratch and developed to be more versatile than the current underpinnings, this platform will be capable of forming the basis of a variety of body-styles and types of vehicle. It is expected to take a version of BMW’s xDrive four-wheel-drive system and to also incorporate the Efficient Dynamics technologies such as Stop-Start.

The Crossman and next-generation Mini are also expected to share their underpinnings with a new entry-level BMW, a supermini-sized model to sit in the range below the 1-Series. This will give BMW a rival for the likes of the upcoming Audi A1, Alfa Romeo Racer and suchlike, and help it to lower its average fuel economy in line with forthcoming European legislative demands.


China Watch

Shanghai Auto to issue bonds
By Jin Jing, Shanghai Daily 18th December, 2007

SHARES in Shanghai Automotive Co Ltd, the listed unit of China’s largest car maker, gained 1.18 percent yesterday after it announced government approval for a proposed issue of 6.3 billion yuan (£420m) of convertible bonds. Shanghai Auto, owned by Shanghai Automotive Industry Corp, will sell the six-year bonds, along with detachable warrants to A-share investors, according to its filing to the Shanghai Stock Exchange yesterday. Shares closed at 25.70 yuan, nearly tripling from the beginning of this year.

The 63 million units of bonds will have a face value of 100 yuan each and 3.6 warrants, the company said. Shanghai Auto offers the bonds with a coupon between 0.8 and 1.2 percent, but the final price depends on interest from institutional and retail investors. Bond holders will be allowed to use the warrants to buy Shanghai Auto’s shares at 27.43 yuan per share after 24 months.

Subscriptions start on Wednesday, and SAIC has said it will buy at least 800 million yuan of bonds as a priority subscriber. The capital will be used to develop its own-brand passenger car, merge and acquire its commercial vehicle business as well as other financial units. Shanghai Auto plans to invest around 20 billion yuan to develop its own vehicles.

Annual production capacity will increase sixfold from the current 50,000 units to 300,000 by 2012, and the product mix will broaden to develop premier sedans, sport utility vehicles and compacts. Meanwhile, the tie-up between SAIC and its smaller domestic rival Nanjing Automobile Corp may end this month. Nanjing Auto may inject its complete car manufacturing and auto parts assets into SAIC Motor for 10 percent of shares.


SAIC’s big boast
China Car Times 18th December, 2007

The Chinese motoring press are reporting that SAIC plans to push out 30 cars over the next five years, that includes five new platforms.

Roewe has been selling well so far this year, with SAIC selling 18,000 Roewe 750’s between March and November of 2007, and on average sells around 2000 vehicles per month in 2007. China Car Times knows of the Roewe 750 (W161 platform) and the Roewe 550 (W261 platform) we are now hearing rumors of an S161 platform which will form the basis of a small car, the Roewe SUV is based off the S100 platform.

Surely our more astute readers will realize that SAIC are actually claiming that they can bring out a new car every two months over the next 60 months/five years.

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Fiat and Tata: an Alfa Romeo and Jaguar JV?

CLIVE GOLDTHORP

AROnline’s Automotive Industry sources all seem to think that Tata Motors Limited’s bid for Jaguar and Land Rover should succeed. However, if Tata Motors does win the prize, then we believe that Fiat Group Automobiles S.p.A. (FGA) may not only be entitled to claim some of the credit but might also stand to gain considerable benefit from the transaction.

FGA was originally named by Automotive News Europe (ANE) as one of six potential bidders for Jaguar and Land Rover in August, 2007 but did not, in the end, submit an indicative bid. Indeed, FGA has since, reportedly, been advising Tata Motors on that company’s bid for the two British marques. However, AR reckons that FGA’s discussions with Tata Motors may well have extended beyond advice to an evaluation of the potential for a Joint Venture between FGA and a Tata Motors-owned Jaguar and Land Rover.

FGA and Tata Motors have, of course, already concluded an Indian JV agreement which was signed on the 12th October, 2007. The still, apparently, unnamed JV company’s manufacturing base at the FGA plant at Ranjangaon in the State of Maharashtra, India has the capacity to produce in excess of 100,000 cars per annum and 200,000 engines and transmissions per annum. Three Fiat models and one Tata model will be manufactured at the facility while all the Fiat-branded cars built there will be distributed in India by Tata Motor’s Fiat-Tata dealer network which will expand to 100 outlets by mid-2008.

FGA currently produces the final version of the ageing Fiat Palio at Ranjangaon and should start production of the B segment Fiat Grande Punto and C segment Fiat Linea there during Q1 or Q2 2008. The engines manufactured at the plant will include the 1.2- and 1.4-litre FIRE petrol engines and a 1.3 Multijet diesel engine which will, according to the Chairman of Tata Motors, Ratan Tata, enable his company ‘to access world-class powertrains from Fiat for its next generation car offerings.’

FGA is collaborating with Tata Motors on the latter’s Rs 1-lakh car and the two companies are also reportedly co-developing Fiat’s replacement for the ten year old Fiat Palio range. India’s Economic Times reported an informed source as saying: ‘The Palio will need a replacement and the JV has already started work on the development of the new small car.’

The newly appointed President and CEO of Fiat Automobiles India Limited, Rajeev Kapour, was recently quoted in India’s Business Standard as saying: ‘We may increase the (Ranjangaon) plant’s production beyond 200,000 cars and 300,000 engines and transmissions annually.’ The Indian business media has also suggested that, in addition to the distribution and marketing of the Fiat Palio (and any replacement), the Grande Punto and the Linea, Tata Motors may also be planning to import FGA’s portfolio of prestige marques namely Alfa Romeo, Ferrari, Lancia and Maserati and market them in India.

FGA and Tata Motors have, then, already developed a very close commercial relationship but a clear inference that the two companies are ready to explore further opportunities for cooperation emerged when FGA’s CEO, Sergio Marchionne, was recently interviewed by ANE’s Chief Correspondent, Luca Ciferri. Ciferri asked the Italo-Canadian Marchionne why FGA had considered and then rejected the idea of bidding for Jaguar and Land Rover. Marchionne replied:

‘We were attracted by a number of things. The most noticeable being Land Rover’s distribution network and Jaguar’s platforms and powertrains, which we would have used to make top Alfa Romeo models with front longitudinal engines and rear-wheel drive.

‘At the same time, we felt we would not be able to manage the Jaguar and Land Rover brands while also leading the proper execution of the Fiat Group Automobiles relaunch plan. We remain open to talks with the future owner of Jaguar and Land Rover about possible cooperation.’

AROnline therefore, has little or no doubt that, if Tata Motors emerges as Jaguar and Land Rover’s new owner, the talks mentioned by FGA’s Marchionne will be pretty high on the two companies’ agendas. We certainly reckon that there would be plenty of scope for platform sharing in such a scenario. The lighter, reengineered, MY10 version of Alfa Romeo’s Premium platform might, perhaps, underpin Tata Motor’s rumoured C and/or D segment contender(s) while, if last week’s various First Drive reports are accurate, the Jaguar XF’s platform seems to tick all the boxes dynamically and so would probably be a good basis for the somewhat delayed Alfa Romeo 166 replacement, Project 941 (subject to the resolution of some potential packaging issues).

Indeed, given that Ford Motor may well retain a significant stake in a Tata Motors-owned Jaguar and Land Rover, already has what amounts to a JV with FGA at Tychy in Poland for the manufacture of the forthcoming Ford Ka and that Sergio Marchionne told ANE’s Luca Ciferri that, ‘mid to long term, I have no doubt we will have to produce in the NAFTA area to sell at a profit in the US,’ AROnline believes that there must also be scope for Ford Motor to participate in any further FGA/Tata Motors JVs in either the Americas or Europe.

AROnline still reckons that a Tata Motors-owned Jaguar and Land Rover would revive the Rover marque and, in view of the above, we are rapidly becoming more optimistic about such a revival’s prospects of success…

(Editor’s Note: AROnline wishes to thank Edd Ellison of the excellent www.italiaspeed.com website for his assistance in obtaining much of the information used in this article.)

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Nanjing takeover date is set

JOHN REVILL, Birmingham Post

A full takeover of Nanjing Automobile by its domestic rival Shanghai Automotive will be sealed on Boxing Day, The Birmingham Post has learned. The two companies – which have competed over the MG Rover legacy – have agreed in principle to a merger to create a Chinese automotive giant. Under the terms of the deal Nanjing Automobile Corporation would own no more than 15 per cent of Shanghai Automotive Industry Corporation.

But sources said the deal would not affect NAC’s plans to restore vehicle production to Longbridge and relaunch its version of the MG TF early next year. The deal would create the biggest Chinese automotive maker, with a combined production of more than 1.6 million vehicles. It would be a step towards creating a national Chinese car champion that would eventually compete head-on with global giants.

The Beijing government is seeking to strengthen the industry by encouraging tie-ups and mergers. No names have been decided for the new joint company, although East Ocean Company is among those under consideration. A source said: ‘This will be good news for Longbridge. SAIC will bring more products and volumes at Longbridge will be higher than before. It is a logical move. SAIC is much bigger than NAC and has more money. Joint groups could work together on the engineering and research and development.’

The takeover could also pave the way for NAC’s blueprint for Longbridge, which will see part of its portion of the old South Works site redeveloped. A new design centre could be set up, to house the 250 engineers who have been working for SAIC at Ricardo’s site in Leamington. The source added: ‘Instead of having two separate R&D centres there could now be one. The total investment in R&D, manufacturing and sales and marketing will go up.’

No new buildings will be constructed under the blueprint, although existing offices will be refurbished. The blueprint will also include greater capacity for production and a better logistics and quality control. This will be necessary as part of the plan is to source more components from China to ensure profitability and reduce the problems the firm has had with defective parts imported from the Far East.

Broken windscreens were among the parts which delayed the relaunch of the TF from this year into 2008. SAIC is thought to have said it does not want to interfere with NAC’s plans. The source said: ‘SAIC respect NAC’s plans but will look at how to improve things in the future. That is the Chinese way, one firm will not say ‘I am the boss’, they will co-operate.’

The long delayed relaunch of the MG TF will still go ahead at either the end of February or the beginning of March under the plan. But the deal, although a takeover, has been approved by both companies. ‘It is like a marriage. If you want to marry someone it is impossible if the other person doesn’t like the other one. Once these companies were competitors, now they have become part of one family, which is very good for sales and marketing for example. Of course this is good news for Longbridge, because it means a bigger firm. It means there is going to be more money to develop the next generation of cars. SAIC has some very big ambitions to redevelop this area. It will be giant company,’ the source added.

A spokeswoman for SAIC said: ‘Apart from a July 26 letter of intent to cooperate with Nanjing Auto, no new agreement has been signed so far.’ She said she did not know when a deal might be announced.

SAIC’s ventures with General Motors and Volkswagen are China’s biggest car sellers, with combined sales of 441,584 cars in the first half of 2007, or 14 per cent of the market. But the company faces tough competition in the commercial vehicle area from local rivals FAW Group and Dongfeng Motor. Nanjing Auto’s MG brand cars, Yuejin light trucks and Iveco light buses could be valuable additions to SAIC’s portfolio…

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Land Rover’s reason to be cheerful – the LRX Concept

AUTOCAR

This is the Land Rover LRX concept, a lightweight cross-coupe is due to be premiered on the 18th December. Company bosses say this upmarket junior crossover SUV is no flight of fancy. It is, they say, very close to a brand new Land Rover production car that will go into production at the Halewood factory in mid-2009. And Autocar.co.uk can bring you full pictures and information on it before anyone else.

The LRX will be shown at the Detroit show in January and represents what Land Rover global marketing director Colin Green calls ‘the future of the brand’. The LRX’s design is intended to show how serious Land Rover is about building efficient and sustainable cars for the future, whilst still including all the features customers expect.

The styling is quite different from any previous Land Rover, but the brand identity remains in the grille design, clamshell bonnet, dark pillars, floating roof and what Gerry McGovern calls ‘visual robustness’. Even the interior highlights environmental credentials, with a cabin that bristles with natural and biodegradable materials, such as vegetable-tanned leather and natural felt.

Despite its big car looks, the LRX is actually 10mm shorter, and a striking 250mm lower than the Freelander. The LRX will start with the same powertrains as its bigger stablemate, and even have the same basic chassis and suspension. A developed version of the Land Rover Terrain Response system will ensure that it has a similar breadth of ability as the Freelander, too. Stop-start technology will be fitted to the car as standard from launch, but expect green credentials to get even better when a hybrid powertrain joins the lineup later in the model’s life.

More than any other model or concept of the past five years, the LRX shows what Land Rovers will be like in the 2010s, when CO2 output and fuel economy will become every bit as important as horsepower.

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Jaguar and Land Rover sale likely to take place in first quarter

Amy Wilson, Automotive News Europe

Ford Motor Co.’s anticipated sale of its Jaguar and Land Rover brands probably won’t take place until the first quarter, a top Ford executive said on Tuesday.

The automaker had been expecting to complete the sale by the end of the year or early in the first quarter. ‘It is most likely going to be in the first quarter,’ Mark Fields, Ford’s president of the Americas, told reporters at a press event in suburban Detroit. Fields acknowledged Ford is preparing to wrap up business for the year. There are only 10 business days left before the Christmas holiday.

‘First and foremost in our minds is to make sure that we sell to a buyer that looks to grow it,’ Fields said. ‘We’re still going through the process.’ India’s Tata Motors Ltd. and Mahindra & Mahindra Ltd. have submitted revised bids for the brands, according to media reports on Monday.

Their earlier bids for the luxury brands were in the range of £900m and £1bn, and the companies have raised those bids, according to one report. A Tata group spokesman declined comment, while a Mahindra spokesman did not immediately return a call seeking comment.

Local newspapers last week reported final bids in the range of £750m-£1.1bn billion had been placed by Tata Motors, Mahindra and Apollo, as well as JP Morgan-backed One Equity Partners, the bidders on the final shortlist.

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China’s SAIC, Nanjing Auto agree tie-up, sources say

Automotive News Europe

Top Chinese car maker SAIC Motor and smaller rival Nanjing Automobile group have agreed in principle on a tie-up under which Nanjing Auto would own no more than 10 percent of SAIC, two sources close to the talks said today. If it goes ahead, the deal could be a step towards creating a national Chinese car champion that would eventually compete head-on with global giants. The government is seeking to strengthen the industry by encouraging tie-ups and mergers.

Under the deal, Nanjing Auto, owner of the classic MG car brand, would fold its vehicle and auto parts operations into Shanghai-based SAIC in exchange for a stake in SAIC, the sources, who declined to be identified, told Reuters. They did not provide financial details. A 10 percent stake in SAIC is worth 16.9 billion yuan (£1.2bn), according to the company’s closing share price on Wednesday of 25.76 yuan.

A binding agreement is expected to be signed by the end of this month after senior executives of the two companies met to work out details last week, the sources said. ‘Nanjing Auto is likely to get between 5 and 8 per cent of SAIC Motor,’ said one of the sources. ‘The stake will not exceed 10 per cent.’ The stake would transferred from SAIC’s parent group, he added.

A spokeswoman for SAIC, asked for comment, said: ‘Apart from a July 26 letter of intent to cooperate with Nanjing Auto, no new agreement has been signed so far.’ She said she did not know when a deal might be announced. Officials at Nanjing Auto, which is also government-controlled, declined to comment. SAIC’s ventures with General Motors and Volkswagen are China’s biggest car sellers, with combined sales of 441,584 cars in the first half of 2007, or 14 percent of the market.

But the company faces tough competition in the commercial vehicle area from local rivals FAW Group and Dongfeng Motor, who’s Jiefang and Dongfeng truck brands are strong. Nanjing Auto’s MG brand cars, acquired from failed British car maker MG Rover, its internally developed Yuejin light trucks and its Iveco light buses made in a venture with Fiat could be valuable additions to SAIC’s portfolio, industry analysts believe.

SAIC is growing rapidly and in March rolled out its first own-brand sedan, based on acquired technology. It plans to make 2 million vehicles annually by 2010, up from expected production of over 1.5 million this year, its chairman said in October. The SAIC group signed a letter of intent in September to buy a controlling stake in engine maker Shanghai Diesel Engine Co. Shanghai Diesel said on Monday that detailed negotiations on the purchase were underway.

In addition to the bus operation, Nanjing Auto operates a loss-making venture making cars with Fiat, one of the very few car joint ventures that has not taken off in the world’s second largest auto market. One of the sources said assets that Nanjing Auto would inject into SAIC included its 50 per cent holding in the Fiat car venture. A Nanjing Auto executive said last month he did not rule out an eventual dissolution of that venture.

‘Some of the assets are valuable and some are less so,’ the other source said without elaborating. A Fiat executive based in China declined to comment on the prospects for its car venture.

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MG vs Rover: China and India in race to rebuild British brands?

CLIVE GOLDTHORP


Both marques to return to Europe?

AR’s attempts to obtain official information from either SAIC Group or Yuejin Motor Group about the progress of the negotiations initiated as a consequence of the letter of intent signed by the two companies on the 26th July, 2007 have, to date, proved to be unproductive.

However, according to a recent report on www.chinanews.com.cn, the formal signing of a Framework Agreement finalising the ‘amalgamation’ of SAIC Group and Yuejin Motor Group/Nanjing Automobile Corporation and/or their respective SAIC Motor/Roewe and NAC MG units has been scheduled for the 26th December, 2007.

AR understands that a high-ranking SAIC Group/SAIC Motor delegation visited NAC MG UK Limited at Longbridge on the 22nd November, 2007 and has good reason to believe that SAIC Motor may, in fact, already have a post-amalgamation plan for the Longbridge plant in place. We have no doubt that the Chinese Government’s Automotive Industry analysts will have been monitoring Tata Motors Limited’s widely anticipated acquisition of Jaguar and Land Rover very closely and reckon that, in the context of geo-political dynamics, the prospect of an Indian-owned, British-based, Jaguar and Land Rover should really have convinced the Chinese Government and SAIC Motor of the commercial and political need to expand the latter’s British design and engineering facility and, hopefully, establish a manufacturing base at Longbridge.

BBC News reports that, when opening of the £20m Longbridge Innovation Centre on the 10th December, 2007, Liam Byrne MP, Minister for the West Midlands, also launched the West Midlands Economic Strategy which provides for ‘up to £25bn of public spending’ to be ‘spent on boosting jobs over the next five years.’ Advantage West Midlands say that the aim ‘is for 10,000 new jobs at Longbridge over the next fifteen years.’ We therefore wonder whether or not any of that public funding has already been allocated to a shortly to be SAIC Motor-owned NAC MG UK Limited and, if so, how many new jobs might be created at the Longbridge plant.

Britain’s Foreign Secretary, David Miliband MP, met the new Chinese Foreign Minister, Yang Jiechi, in London last week and the transcript of their Press Conference here, in our view, clearly demonstrates the importance which the new British and Chinese Governments place on bilateral relations. British Prime Minister, Gordon Brown MP, visits China next month and the Foreign Secretary confirmed that ‘high on his agenda will be the very practical bilateral exchange that he is looking forward to on issues like education, scientific cooperation, scientific and technological cooperation, trade and economic development issues…’

AR currently expects the announcement of Tata Motors Limited’s successful bid for Jaguar and Land Rover to be made at the North American International Auto Show in Detroit starting on the 13th January, 2008. The Prime Minister’s visit to China would, in that context, certainly provide both the British and Chinese Governments with an excellent opportunity to make a joint announcement about the future of the Longbridge plant under a SAIC Motor-owned NAC MG UK Limited.

Indeed, according to a report by Automotive News Europe’s Anna Smolchenko, Russian President Vladimir Putin and French President Nicolas Sarkozy are believed to have personally sealed last week’s deal between AvtoVAZ and Renault so, perhaps, our Prime Minister and China’s President Hu Jintao will follow that precedent.

Interestingly, an informed, UK-based, source with more than a little knowledge of developments in China concedes that the timetable suggested above might not be too dissimilar to that adopted by the relevant players there.

Time alone will tell but there must, at least, be a distinct possibility that January, 2008 will witness the start of an Indo-Sino race to rebuild MG and Rover as global brands with British designed, engineered and manufactured products.

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Midas makes a return

KEITH ADAMS


The gorgeous Midas Gold is available again…

The Midas Owners Club and Alternative Cars Ltd have recently announced that the Midas Gold Coupe Mk3 will be making a welcome return to the market. Hailed by Motor magazine as ‘the best kit car ever’ when it was introduced in 1985, the Midas Gold Coupe, as styled by Richard Oakes, was an object lesson in how to make an MG Metro even sexier. It featured an all composite monocoque, that had passed the 30mph crash test, and incorporated undertrays designed by Gordon Murray, then the Brabham F1 designer and a Midas owner.

The car will make a return thanks to the chance discovery of the Mk3 Coupe body moulds in Berlin. A factory fire led to the premature demise of the original Midas Cars Ltd at the end of 1989. The moulds for the Mk3 Coupe then changed hands a couple of times, before being sold to Berlin where they were briefly used in youth training project before disappearing.

Thanks to the efforts of Dutch Midas owner Hans Efde and German owner Urs Kohlbrenner, the moulds were tracked down at a college in Spandau, Berlin. The Midas Owners Club was keen to buy the moulds and asked Alistair Courtney, MD of Alternative Cars Ltd the manufacturer of the current Midas range, to fly out to Berlin to inspect the moulds and to negotiate their purchase on behalf of the club. This trip proved successful and the moulds have now been purchased and retrieved by the club.

This move means that the Midas Owners Club will now be able to supply any body part from a vent cowl to a full replacement monocoque. This includes the moulds for the LHD dash board and the coupe doors, both of which have been unavailable since 1991. The club is also in discussions with Alternative Cars Ltd about producing a full kit.

Anyone interested should contact the club secretary, Tony Moss.

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Is Ford ready to roll over Rover?

Automotive News


Is the Rover badge set to return to grace Tata’s products? Stranger things have happened.

Turns out there’s a third well-known brand involved in Ford’s breakup of the Premier Automotive Group. And, no, it isn’t Volvo. You’ll remember that Ford’s Land Rover division paid BMW about $20 million last fall for the rights to the defunct Rover car brand. That old dog just may bark again.

Ford won’t confirm that the Rover name will go with the upcoming sale of Jaguar and Land Rover. “We are not discussing any details of the potential sale,” said Ford spokesman Tom Hoyt. But if Rover is being dealt along with Jaguar and Land Rover, it gives a potential buyer three brands that could form a ready-made car company with worldwide name recognition. Rover cars were sold in 65 markets before the company skidded into oblivion in 2005.

India’s Tata is thought to be the leading contender to buy Jaguar and Land Rover in a deal that could close by the end of the year.

Tata has history with Rover cars: The Indian company built the small CityRover for MG Rover from 2003 to 2005. That car was based on a re-badged Tata Indica. If Tata gets Rover, it could relaunch the Rover brand quickly, using the name on a number of existing vehicles. A Tata spokesman said he had not heard about the Rover name being included in the deal.

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Tata: Ratan’s Rover revival?

by CLIVE GOLDTHORP


Makers of the Indica V2, TATA, should be announced as Jaguar/Land Rover’s new owners soon…

Tata Group unit, Tata Motors Limited (Tata Motors), appears to be emerging as the frontrunner in the race to acquire Jaguar and Land Rover from Ford.

India’s Economic Times reported that Tata Motors, Mahindra and Mahindra and JP Morgan-backed One Equity Partners all submitted their final bids last Wednesday. However, according to one investment banker: ‘Tata appears to have the edge because it is larger, because it has demonstrated seriousness of intent and because there is a level of comfort with the unions.’

Roger Maddison, National Automotive Officer for the Amicus section of Unite was one of four national Trade Union officials to attend the recent presentations by all three bidders at Goldman Sachs’ London office. Mr. Maddison was unequivocal in his support for Tata Motors’ bid: ‘We prefer Tata, if Ford decides to sell. We would not be prepared to support the others and we have made them fully aware of that. Tata have great hopes for the future. They believe they have the chance to sell Jaguars and Land Rovers in the growing Asian and Chinese markets… If they can crack the Asian market, we would have three plants all working at extra capacity. We were all quite excited by Tata’s plans; they are a massive, massive company.’

However, research undertaken by AR suggests that there may well be another, more significant, reason for Tata Motors’ emergence as the frontrunner: access to the disruptive technologies under development at Tata Motors European Technology Centre plc (TMETC). TMETC is headed by Dr. Clive Hickman, a former MD of the highly respected automotive engineering and design consultancy, Ricardo UK Limited, and is currently based in temporary accommodation at the University of Warwick.

TMETC’s main strategic role is to identify and lead the development of disruptive technologies on behalf of Tata Motors. Dr. Hickman explains: ‘Disruptive technologies can give us a distinct advantage as our competitors are unable to bring them into market. Take transmissions, for example, our competitors have made significant investments in conventional automatic transmissions and this prevents them from doing something completely different. But being new in this field we don’t have any investment in automatic transmissions, enabling us to develop innovative, efficient and cost effective technologies that, due to their legacy investment, our competitors will be unable to adopt. It’s thinking outside the box.’

Tata Motors’ planned launch of an Rs 1-lakh (£1250) car in India during 2008 clearly demonstrates the company’s desire to ‘think outside the box.’ However, the agreement which Tata Motors concluded with Moteur Developpment International (MDI) of France in February, 2007 provides an even better example of the company’s commitment to the development of disruptive technologies. MDI was founded by former F1 engineer Guy Negre in 1991 and has developed engines powered by compressed air which are petrol, fuel gas, bio-diesel, liquid gas, alcohol and ethanol compatible.

Tata Motors (and TMETC?) is developing this Compressed Air Technology (CAT) with MDI and has a licence to manufacture and market CAT-engined cars in India. Indeed, in August, 2007, India’s Economic Times suggested that Tata Motors’ Rs 1-lakh car might even be launched with a CAT engine next year but, in response, a spokesman for Tata Motors maintained that the technology required a ‘couple of years’ work… More information about MDI and CAT can be found at www.theaircar.com.

AR believes that the prospect of an agreement which would provide Ford with access to such disruptive technology might well prove irresistible to the company and doubt that either Mahindra and Mahindra or One Equity Partners can offer a similar incentive… We reckon that Ford plans to make a formal announcement of the sale of Jaguar and Land Rover either just before or at next year’s North American International Auto Show which opens in Detroit’s COBO Centre on the 13th January, 2008 and expect Tata Motors to be the successful bidder.

Ford has not, as yet, confirmed that the sale of Jaguar and Land Rover includes the Intellectual Property Rights to the Rover name (and badges?) which the company bought from the BMW Group for a reported circa £6m in September, 2006. However, commercial and legal logic suggest that the successful bidder will acquire the Rover brand in addition to the Jaguar and Land Rover marques. Indeed, on the basis of our research, AR believes that the IPRs in the Rover name may be of considerable interest to Tata Motors…


Disguised Tata V3 undergoing testing – the aim is to achieve VAG levels of quality. (Picture: vicky.in)

TMETC’s first major project was to lead a ‘Programme of Craftsmanship’ designed to ensure that the new Indica V3’s external and internal quality matches European ‘best in class’ standards. Dr. Clive Hickman has indicated that Tata Motors uses Volkswagen quality standards as the benchmark and confidently asserted that ‘…if we can achieve the body and trim quality, and still maintain our costs, our vehicles will sell very easily in Europe. It’s not a million miles away; we can easily raise the bar.’

Tata Motors has developed an entirely new platform for the Indica V3 which will be a slightly bigger B segment player than the current Indica (aka CityRover) and feature new multi-jet common rail (DICOR) diesel engines. Our sources in India expect the new Indica V3 to be announced during Q1 or Q2 2008 and claim that a new crossover model, the X2, which will share the Indica V3’s platform, will be launched during Q3 or Q4 2008. The V3 will initially be targeted at the European market and there will be both ‘mild hybrid’ and electric versions in the model range.

However, as Mr SA Hasan, MD of Tata Limited, Tata Group’s principal UK unit, recently observed, Tata Motors ‘will have to develop a Dealer Network before re-launching the car.’ Mr. Hasan then, reportedly, hinted that Tata Motors may wait until the bidding process for Jaguar and Land Rover was over before finalising the company’s plans for entry into the European and UK markets.

AR believes the most likely reason for such a postponement may well be that Tata Motors intends to launch the new V3 and X2 models in the European and UK markets under the Rover brand if the company does, in the end, purchase Jaguar and Land Rover from Ford. However, a Tata Motors-owned Rover would clearly need a second, larger, platform in order to become viable and our sources reckon that Tata Motors and TMETC are developing such a platform to underpin an additional model range(s) for introduction in 2012 or 2013 – that development schedule would probably be accelerated by the acquisition of Jaguar and Land Rover… Indeed, any such C and/or D segment Rover model range(s) might even be built at Halewood on Merseyside in place of the already ageing Jaguar X-TYPE.

MG and Rover enthusiasts have, in our view, good cause to look forward to 2008 with more than a little optimism. We reckon there is an, at least, reasonable chance that, by the end of next year, a SAIC Motor-owned MG and a Tata Motors-owned Rover will both be developing British-designed and engineered products and finalising their respective plans to re-launch the two famous British marques.

The irony is that SAIC Motor UK Technical Centre Limited and Tata Motors European Technology Centre plc are currently located within a few miles of each other in Warwickshire…


2007’s Elegante concept, and its Xover brother clearly shows that Tata is looking towards the West for its future…

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BCA to auction rare Rovers

by CLIVE GOLDTHORP


James Gibson, Manager, BCA Blackbushe, and the cars in the forthcoming auction.

British Car Auctions (BCA) are to auction three of the last ‘as new’ UK-built MG Rovers at the company’s Blackbushe Auction Centre on the 21st December, 2007 on behalf of Inchcape PLC.

All three cars have been in storage since MG Rover Group Limited collapsed in April, 2005 and were never made available for sale so are now offered with delivery mileage and for registration on 07/57 plates.

The cars concerned are a MG TF 160, A Rover 75 V8 and a Rover 75 Limousine. The MG TF 160 is finished in metallic blue with a black hood and leather and sits on 11-spoke alloy wheels. The 4.6 litre V8-engined Rover 75 V8 is finished in dark metallic blue with a leather interior while the Rover 75 Limousine is one of a limited number produced on the long-wheel base version of the 75 chassis and is finished in light metallic grey with a dark grey leather interior.

The Manager of BCA’s Blackbushe Auction Centre, James Gibson, commented: ‘We have already had a lot of interest from potential buyers, with MG and Rover enthusiasts and collectors in the UK and further afield hoping to own these cars.’

For more information, visit www.british-car-auctions.co.uk.

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News digest

Compiled by CLIVE GOLDTHORP

The Sale Of Jaguar And Land Rover

Tata in home straight for Jaguar and Land Rover
Dominic O’Connell, The Sunday Times 25th November, 2007

TATA, the Indian conglomerate, has moved into pole position in the £1.5bn race to buy Jaguar and Land Rover, two of Britain’s most prestigious car marques. Sources close to the negotiations say that positive meetings last week between Ravi Kant, managing director of Tata Motors, and trade-union and government officials have given the Indian conglomerate an edge over its rivals.

It still faces stiff competition from One Equity, an American private-equity group, and Mahindra, the Indian car group that is bidding with Apollo, another American buyout firm. It is understood that Ford, the American automotive giant that is selling the two marques, could choose a preferred bidder within the next three weeks. The company is selling Jaguar and Land Rover as a single unit.

One Equity’s bid is led by Jac Nasser, a former chief executive at Ford. While Jaguar is loss-making — industry sources say it will lose about £250m this year — Land Rover is having a purple patch. Sources at the bidding teams say they expect the business to make more than $1 billion this year, a remarkable result given the weakness of the US dollar. America is one of Jaguar and Land Rover’s biggest markets.

The sources say that the likely $3 billion price tag will include a one-off payment into the companies’ pension funds. They are in deficit, and negotiations with trustees over the level of the payment are continuing. Tata Motors is part of the sprawling Tata commercial empire presided over by Ratan Tata, chairman of Tata Sons.

Kant and other bidders met unions and government officials last week. Sources close to the negotiations said there was still significant uncertainty over the outcome. ‘Tata has been a hit with the unions and the government, but there may still be an issue over intellectual-property transfer and, of course, price,’ one said.


Jaguar aims to reverse fortunes,
By John Reed, Financial Times, 27th November

Jaguar on Monday launched production of its XF sports saloon, a car on which the lossmaking luxury marque is pinning its hopes for a revival. The brand claims the four-door, five-seat car – which aims to compete with top-flight German luxury offerings – is built to even higher standards than its predecessor, the S-Type. It will be made at Jaguar’s Castle Bromwich plant in Birmingham and exported to 66 countries.

Prices will start at £33,900 for the 2.7 litre diesel, rising to £54,900 for the 4.2 litre Supercharged SV8. The first UK customers are due to take delivery next March. Jaguar, in the process of being sold by Ford Motor, wants to bounce back from a series of strategic missteps in the past decade which pushed it into financial losses. A bid to buy Jaguar and its sister Land Rover brand by Tata Motors received an endorsement last week from the trade union Unite, which said it would favour the Indian carmaker over rival suitors seeking to buy them from Ford.

Ford does not report results for its overseas premium brands, but says that Jaguar has narrowed its losses this year, while Land Rover is profitable. Jaguar’s unit sales are expected to be down, however.


China Watch

SsangYong aims to boost exports to Europe
China Automotive Information Net

SsangYong will increase output at its Korean factory by 130,000 units to help boost sales in Europe, its largest export market. The Korean carmaker says production capacity at its plant in Pyeongtaek will be raised to 330,000 units a year from 200,000 now, starting in April.

SsangYong, which is owned by China’s Shanghai Automotive Industry Corp (which also owns the Roewe brand and is about to launch its RDX60-based Roewe 550 model (pictured)), says it needs extra capacity in Pyeongtaek because it plans to add more cars to its current line-up, which comprises mostly SUVs. Pyeongtaek, about 65km south of Seoul, is SsangYong’s only assembly plant. SsangYong plans to add five new cars including a sedan loosely based on the World Zenith (Wz) concept that will be exported to Europe. The Wz debuted in Europe in September.

SsangYong says it aims to increase export sales to 74,000 this year from about 65,000 vehicles last year. Most of its exports — 76 percent — are sold in Europe. Its European region includes Russia and the former CIS states such as Ukraine. SsangYong’s leading European markets are Russia, Spain, Italy and France. In Russia, the automaker’s sales nearly tripled to 8958 units in the first 10 months compared with the same period last year, according to the Association of European Businesses in the Russian Federation.

In EU markets, the carmaker’s sales declined to 18,094 units from 26,557 in the first nine months, according to the latest data available from JATO Dynamics.


Ssangyong WZ on its way to Europe soon – will it be MG-badged?

[Source: Auto News 2007/11/27]


SAIC Boosts Investment, Challenging GM, VW in China
By Seonjin Cha and Irene Shen, Bloomberg

SAIC Motor Corp., China’s largest automaker, will increase spending to make cars of its own design, heightening competition with its partners General Motors Corp. and Volkswagen AG. The company will spend at least 20 billion yuan (£1.4bn) to develop between 20 and 30 new models by 2012, President Chen Hong said at a press conference in Shanghai today. That compares with an earlier plan to spend 13.7 billion yuan by 2010.

SAIC Motor is moving up from being a low-wage assembler of overseas brands and is developing five platforms, ranging from recreational vehicles to compact cars. The carmaker has purchased technology from the U.K. and South Korea to help with its own designs. ‘It will take SAIC three to five years to build its own brand and catch up with overseas rivals,’ said Wang Liusheng, an analyst at China Merchants Securities Co. in Shenzhen.

‘SAIC Motor has competitive edge over its overseas rivals with lower costs in parts purchasing.’ SAIC Motor rose 3.4 per cent to 24.34 yuan at the close of trading in Shanghai. The shares have almost tripled this year.

China Growth

Car sales in China surged 24 percent to 7.15 million in the first 10 months of 2007 because of economic growth. The benchmark CSI 300 Index has more than doubled this year, fueling demand as more than three-fifths of Chinese stock-market investors buy new cars with their profits. ‘China has become the most important market for all carmakers,’ said Wang. ‘SAIC has great potential to develop in its own country.’

The carmaker expects group sales of more than 200 billion yuan this year, Chen said. The company is spending about 8 percent of sales on research and development. The automaker expects to sell a total of 600,000 own-brand vehicles by 2010, including Roewe sedans. SAIC Motor’s parent in also in talks about a possible tie- up with Nanjing Automobile Group Co., the Chinese maker of MG cars, to expand its own-brand line-up.

‘M&A is something you grasp when opportunities arise,’ said Chen. ‘We’ll continue to closely monitor market situations in China as well as overseas.’ The two best-selling models in China in the first 10 months were the Volkswagen Jetta, made by FAW-Volkswagen Automotive Co., and the Volkswagen Santana, made by a venture with SAIC Motor. SAIC makes Santana, Passat, Gol and Polo cars with Volkswagen. The Chinese company also makes Excelle, Regal, Sail, Chevrolet Epica and Aveo models at Shanghai General Motors Co.

Shanghai-based SAIC owns 51 percent of South Korea’s SsangYong Motor Co. and paid £53m for the design rights of MG Rover’s Rover 25 and 75 cars in 2005. SsangYong also cut its full-year sales target to 140,000 vehicles from 153,500 vehicles.


MINI


Image: Rendered speculation by AutoExpress

MINI Monte: British blow as bosses plan Monte’s US move
Auto Express 28th November, 2007

MINI is about to make it big in the US – and Auto Express has the details. According to our sources, bosses are set to announce that the hotly anticipated off-road evolution of the new MINI will be built in the States.

This is the brand’s first foray into US car production, but it could lead to sales doubling for the British legend. While the news is still top secret, it’s thought MINI will join BMW at its factory in Spartanburg, North Carolina, where the X5 SUV is built. Pro­duction of the macho MINI has been confirmed for late 2008, and it could be on sale in the UK the following year. The newcomer, due to be called the Monte, will use the MINI’s front-wheel-drive layout. To improve its off-road credentials, though, it will have a raised ride height and wider track.

These changes should enhance the car’s versatility and ride quality signif­icantly. And by repositioning the suspension mounting points, there should be more room inside as well. Power will come from a range of 1.6-litre petrol and diesel engines, including the 175bhp turbo unit from the Cooper S. BMW has hinted there could be a new 1.4-litre oil-burner, too. Buyers will get a choice of manual and automatic transmissions, while the Efficient Dynamics package seen elsewhere in the range will feature, to cut emissions and boost economy.

All this comes at a price, with the Monte set to cost £2,000 more than the Clubman. As a result, base models are likely to start from about £16,500, with flagships as much as £20,000. While the news that the MINI is heading Stateside is a boost for US fans, it isn’t so great for the BMW Group Plant Oxford at Cowley, which would not be developed to build the third model if the plans go ahead.

(Editor’s Note: Car magazine’s Ben Whitworth, has recently written an item on the rumoured BMW X1 at www.carmagazine.co.uk in which he concludes that: ’The X1 (and Mini’s upcoming 4×4) will be built by Magna Steyr in Austria, which currently builds the X3. In turn, X3 production will be transferred to BMW’s own plant in Spartanburg, South Carolina, where it will be built alongside the X5 and X6. Looks like rumours of the 4×4’s demise have been somewhat exaggerated…’)

Posted in: AROnline News
Keith Adams

About the Author:

Created www.austin-rover.co.uk 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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