Press Comment : Big questions for SAIC Motor on Longbridge’s future

David Bailey, Birmingham Post, 25th August, 2009

With only limited MG TF production to date, and soft-top sales set to fall off as Autumn and Winter fast approach, concern is growing that TF production will be halted later this year in order to stop a stockpile of unsold cars building up.

In a statement released yesterday in response to questions by Peter Plisner of the BBC, MG Motor UK Ltd said “no final decision has been made regarding a temporary shutdown of our production facility… if such a decision is taken we are likely to make a statement at that time confirming our intentions.”  In other words, they’re clearly considering a shut down, if they haven’t already decided.

There has been only token TF production at Longbridge – it was started last year as a sign of commitment by the owner, SAIC Motor, in the plant. The car is basically a 16-year old design, with nearly all of the parts brought in from China, and is not sustainable beyond the very short term. If production is halted one wonders whether it will actually ever restart.

In a statement released yesterday in response to questions by Peter Plisner of the BBC, MG Motor UK Ltd said ‘no final decision has been made regarding a temporary shutdown of our production facility… if such a decision is taken we are likely to make a statement at that time confirming our intentions.’  In other words, they’re clearly considering a shut down, if they haven’t already decided.” Professor David Bailey, Coventry University Business School

Meanwhile, production of the medium-sized MG6 also appears to be stalled whilst SAIC Motor still searches for a diesel engine for the model that meets European demands. This is somewhat surprising given that the car it is based on – the Roewe 550 – is already on sale in China.

Critically, Nanjing/Shanghai has yet to give MG6 production at Longbridge the green light, despite having said back in 2008 this was on the cards for 2010. Even if Shanghai does give the go-ahead, we’re now looking at production starting in 2011 at the earliest – which makes one wonder what MG employees will be doing in the meantime.

Whilst the huge downturn in the car market has clearly affected Shanghai’s planning, the delay in sourcing engines leaves me wondering quite where this leaves MG production at all at Longbridge. Is Longbridge again in limbo? Indeed, what exactly is Shanghai now planning for its operation at Longbridge? Here, some clarity on Shanghai’s strategy for Longbridge would be very welcome.

Progress since 2005 has been painfully slow, in part because of the Shanghai/Nanjing merger and in part because of concerns over build quality – but MG TF production eventually re-started in 2008 to much local celebration. R&D also moved back to Longbridge from the Shanghai operation with Ricardo. All this offered hope for the future.

Given the delays and uncertainty, the big questions for SAIC Motor are: will TF production be halted – if so will it restart? Will MG6 production start at Longbridge? If so, when? What further plans and models – if any – does Shanghai now have for Longbridge? Some answers would be very welcome…” Professor David Bailey, Coventry University Business School

Yet huge uncertainty now looms. If MG TF production is halted later this year, and with no definite MG 6 production scheduled, is this the end for MG assembly at Longbridge?

Of course, having Shanghai’s R&D operation at Longbridge is very welcome. But also having Shanghai-made MG cars rolling off the assembly lines could bring not only jobs, but also an iconic symbol of regeneration and a ‘brand Birmingham’ awareness in China, one of the fastest growing economies in the world.

Given the delays and uncertainty, the big questions for SAIC Motor are: will TF production be halted – if so will it restart? Will MG6 production start at Longbridge? If so, when? What further plans and models – if any – does SAIC Motor now have for Longbridge? Some answers would be very welcome…

[Source: Birmingham Post]

[Editor’s Note: Professor David Bailey works at Coventry University Business School.]

Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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