News : July 2006
Longbridge production assured
KEITH ADAMS and IAN ROBERTSON
MG TF confirmed for re-introduction in 2007 – and built in Longbridge.
FOLLOWING a bustling press conference in the centre of London this afternoon, Nanjing executives have finally faced the world’s media, and revealed a number of its plans for the MG marque – and the headline story is that the MG TF will definitely be built in Longbridge and will be back on sale in late 2007, and the US deal announced by Oaklahoma is far from being set in concrete.
The press conference was a ‘surreal’ affair, with much of it being presented in Chinese, but the crux of it was to confirm much of what has been speculated in the press recently, that NAC-MG would be producing a total of 15,000 TFs in Longbridge, with an initial volume of around 4000 per year. The company confirmed that production would resume in early 2007 with sales taking off in the second half of the year.
NAC-MG’s boss, Mr Yue Yang Wie confirmed that the company had major confidence in the MG brand name, and it would be pushing it hard as a global brand, although he firmly stated that the Oklahoma deal had yet to be cemented, and currently amounted to a letter of intent signed by both parties. According to NAC-MG, the Americans had jumped the gun, and the future of the Ardmore site depended on the needs of the business.
Parties already signed up to play a part in the re-birth of MG are Stadco (the producers of the MG TF body), Arup (the design consultants), XPart (the parts distribution business) and Lotus.
As widely reported, the Chinese production plant is progressing towards completion, and NAC-MG confirmed that once up and running, it would have the capability of producing 200,000 cars, 250,000 engines, and 100,00 gearboxes per annum.
Longbridge R&D Centre
A downscaled Longbridge will feature some new attractions…
The good news is that the development of Euro IV engines, previously completed by Powertrain, would be carried into production, with much of the final stages now being complete. Bulking up the European end of the operation, a UK Research and Design Centre would be set up in order to develop Euro-specific models, and there would be a sister centre in Nanjing for the domestic market cars.
Although the numbers being spoken of are small, there was much optimism that NAC-MG would get the job done. Nanjing has already recruited 57 specialists, and will hire many more once production of the TF commences, although no figures were spoken of – perhaps to ensure expectations are kept realistic.
However, the worst fears of Union leaders and local workers were all-but confirmed, as there was no announcement forthcoming that saloon car production would re-start at Longbridge. Although it was widely expected that the saloons would be a China-only proposition, it was still a blow to learn that Longbridge will become a management and R&D centre with a low production volume facility for sports cars…
In closing, Mr Wie confirmed NAC-MG’s intentions to make the company great once more.
NAC-MG’s boss, Mr Yue Yang Wie underlined the company’s confidence in the MG name.
At a glance
· The company will now be known as NAC-MG.
· Nanjing will make an initial investment of £10m into Longbridge.
· MG TF production to resume at Longbridge in 2007, starting in low volumes of 15,000 per annum.
· The MG range will be powered by K-Series EUIV development engines.
· The American deal has yet to be agreed between the prospective joint venture partners.
· NAC-MG will be working with existing partners, Arup, XPart and Stadco, as well as new ones such as Lotus.
· There was nothing to suggest saloon production would be resuming in Longbridge.
From Abingdon to Ardmore
SINCE MG Rover sank beneath the water we have all been staring into the pool waiting for the mud to settle and show us what life remains. Just when we think the water has cleared someone stirs it all up again. The news from Ardmore, Oklahoma has certainly done that with big talk and no answers. At least it gives us a great opportunity to wade in and have fun with our own theories.
The first thing we need to remember is that what we have heard so far is an American press release for American audiences. We should allow them to talk up MG Inc. in the States just as we expect the marque to be talked up on this side of the Atlantic pond. Once we have the London press conference out of the way on July 17th we may have a better understanding of the complete strategy, though even then it will not be the final story.
What we have to go on so far is the reality of a new factory under construction in China and wild talk of another in the US. The stateside operation sounds exciting and for this reason is a source of worry for fans of Longbridge. The gloomiest assessment seems to have come from The Times which is predicting the majority of western production going to the US. Certainly the promises of output at Longbridge have been on a downward trend but there are no indications yet that it will be the poor relation to the American site.
The work force at Ardmore is planned to be around 550 which is about the same as Lotus have on the shop floor at Hethel. Lotus capacity is for around 5000 a year yet MG Inc. is looking for up to 16,000 out of the new factory. Maybe they mean ultimate output for it will still be a tiny facility, one commentator describing it as a “shed”. By contrast Longbridge is said to be aiming for around 4000 a year, near Lotus Elise production, although theoretical capacity in the good old days was up to 25,000 a year. This 4000 figure does not make much sense next to the higher figure for the GT particularly when Longbridge appears to have retained the stamping services of Stadco while Ardmore will be assembling kits.
There have also been some suggestions that $2billion will be invested in the American operation, though it should be noted that Nanjing are not claiming that this amount is all in place right now. Whether it is or not is immaterial because it is a fanciful figure at this stage. To get all of MG up and running at full capacity will take every last cent of this sum, but this backwoods shed requires just a fraction. I think we can conclude, therefore, that the figure refers to the amounts that will be spent worldwide over the next couple of years or so, not just the US.
A more worrying development is the news about an R&D facility to be created at the University of Oklahoma. If this were to happen then it truly would be the end of the British MG, but I have my doubts that it will get that far. A full vehicle development operation needs a massive investment, dedicated facilities and highly experienced staff. None of this exists at present in Oklahoma and it would take as long to build up there as it would back in China. Meanwhile, Longbridge has this and is almost ready to go. It is said that the workforce at Longbridge will number around 1000 personnel or more.
If we assume that TF production will match GT production, and so utilises the same 500 assembly workers, then this leaves 500 left over kicking their heels. This is around the size of the previous MG Rover vehicle development strength and leads me to believe that the weight of vehicle design will take place in Longbridge. My guess is that the University of Oklahoma R&D facility will be engaged simply in federalising these designs. The actual reason for its existence is almost certainly linked contractually to the funding coming from the state. Were Oklahoma to become the world centre for MG design then we wouldn’t see another new model for up to five years, certain death for the brand.
Of course these new models are something of a mystery. The last versions of the ZR and ZT can be easily dressed up and pushed out the factory doors, but the ZS (or Rover 45) is also included in this prediction by the media. Surely Honda snatched that one back? Nanjing themselves have often mentioned that a new medium sized car is just around the corner so I can only conclude that the RDX60, or something very like it, is currently under development. Where this development is going on no one ever says, but it cannot be in Oklahoma. There is also the question of what happened to the V8 platform, Nanjing must have bought that. And what about the K Series? Surely that can be federalised, despite what critics have said.
I know that the London press conference on July 17th will make a fool out of any predictions I make, but I am going to stick my head into the muddy pool and describe what I see anyway. What will emerge is the first truly global car enterprise. The big production factory will be in China, with two small but equal sized branches in the US and UK. The Chinese side will concentrate on the saloons, hoping for ultimate output north of 400,000 a year. The US and UK will each achieve around 10,000 sports cars a year, with some saloon car assembly or production of niche versions (estates etc.) in time.
I like to think that each can achieve 50,000 a year in the long term, though they will remain branch factories. The key western market is the US so this will be the centre of expertise for marketing. This is probably just as well since foreigners seem to understand our automotive icons better than we do. Longbridge will remain as the engineering centre of expertise, though we Brits will take the perverse view that we have drawn the short straw.
Oh yes, and we will all be crying into our warm beers because Rover will finally be laid to rest.
Will all come clear on July 17th? I doubt it, but I will be there to find out.
It’s Longbridge, Nanjing and… Oklahoma
SENIOR officials of Nanjing Automobile (Group) Corporation (NAC) today announced the revival of the historic MG brand of vehicles, as well as plans to build a new MG product in Oklahoma, with the formation of MG Motors North America, Inc., in ceremonies held today in Oklahoma City.
MG vehicles will not only be built in Nanjing, China, (NAC’s home), but also at the Longbridge assembly plant near Birmingham, England and at a new American assembly plant to be built at the Ardmore Air Park in Ardmore, Oklahoma. Headquarters for MG sales, marketing and distribution (outside of Asia) will be located in Oklahoma City. Research and development will be in Norman at the University of Oklahoma.
Following the successful efforts to sustain such historically significant English automotive brands as Aston Martin by Ford Motor Company, Bentley by the Volkswagen Group, and MINI by BMW, Nanjing Motors has recruited a seasoned American auto executive, Duke T. Hale, to be the new company’s President and Chief Executive Officer responsible for the revival of MG in the U.K. and Europe followed by the re-launch of MG in North America.
“The prospect of using 25 years of executive experience at Volvo, Mazda, Isuzu and Lotus to restore MG to the automotive landscape is an opportunity I just couldn’t turn down,” said Mr. Hale. “Now that we’ve finalized the important financial, manufacturing and product planning details of this new venture, I’m well along in recruiting a team of experienced auto industry executives to join me. A key ingredient in that effort has been to find the right home to build a completely new model for a global automotive enterprise,” said Hale. “I’m confident that Oklahoma fits that description perfectly.”
Joining Mr. Hale at the announcement ceremony were two senior executives from NAC, Mr. Yu Jianwei, President, and Mr.Wang Hong Biao, Vice President.
“Nanjing Motors is fully committed to the restoration of the MG brand to markets around the world. This will be the key component of our Nanjing’s effort to join leading automakers in the manufacture and sale of high quality, high character automobiles,” said Mr. Yu Jianwei, President, NAC. “As we finalize the installation of MG assembly lines in our new Nanjing plant, we are pleased to confirm plans to build the TF roadster once again in Longbridge, U.K. and the new TF Coupe at a completely new facility in Ardmore, Oklahoma, USA. We will have even more to say about our plans during our press conference next Monday, July 17, at the London Motor Show.”
BREAKTHROUGH GLOBAL PARTNERSHIP BRINGS MORE THAN $2 BILLION IN FINANCIAL BACKING
The creation of the new MG Motors is the result of extensive planning and collaboration among a number of partners who share a common vision of putting modern MG sports cars and sedans back on the road, while extending availability of the historic English brand to new markets around the world.
Joining NAC in this effort are Oklahoma Sovereign Development, LLC; Davis Capital, LLC; the State of Oklahoma; the City of Oklahoma City; and the City of Ardmore. The collective capital investment pledged by these parties exceeds $2 billion, including NAC’s new MG plant in China, re-starting production of the roadster in Longbridge and building an assembly plant and parts distribution center in the southern Oklahoma city of Ardmore.
MODEL LINEUP WILL APPEAL TO CONSUMERS WORLDWIDE
While final details will be made available in the months ahead, MG Motors plans to offer a full range of sports cars and sedans to consumers. The three sedans will be built at Nanjing’s facilities in China, while the MG TF roadster will be built at the factory in Longbridge, U.K. A newly-designed TF Coupe (please see attached product sketch) will be built at the Oklahoma facility in Ardmore.
According to MG Motors officials, approximately 550 jobs will be created in Oklahoma, including headquarters operations, assembly operations, parts and distribution operations and research and development.
The company expects to start construction of the Ardmore assembly facility early in 2007 with production to start by the third quarter of 2008.
MG Motors North America, Inc. (MG Motors), is a joint venture with Nanjing Automobile (Group) Corporation (NAC) and will be solely responsible for the sales, service, parts and distribution of MG vehicles in the U.K., Europe and North America.
For more information, click on www.MGinOklahoma.com.
MG makes a USA comeback?
IT looks as if the next few days are going to be a very interesting time for lovers of all things MG. With Nanjing all set to make an announcement regarding the future of the brand in London next Monday, enthusiasts are hoping that there will be a definite announcement that production will be restarting in Longbridge in the near future.
However, it looks like tomorrow will be seeing another announcement. According to whispers across the water in the USA, a company called MG Motors based in the USA will be breaking some ‘sublime to ridiculous’ news. Although there has been plenty of talk about the SV’s future in the USA, we’ve been assured that tomorrow’s news will be an altogether more interesting development.
For more information, check out the Automotive News website tomorrow from 6.00am Eastern Standard Time.
MGs may be made in the USA
THE rebirth of the MG car brand is under way, and it may include North America.
China’s Nanjing Automobile Group said it will produce cars at MG Rover’s historic Longbridge plant in England, closed since the collapse of MG Rover Group in 2005.
Nanjing intends shortly to announce plans for sales of MGs in the United States and even perhaps of manufacturing in North America, a source close to the venture says.
In 2005, Nanjing purchased MG Rover for £53 million, or about $97.3 million at current exchange rates.
Yu Jianwei, managing director of Nanjing, plans to outline what he hopes to achieve at the British International Motor Show in London on July 17.
Martin Hayes, Nanjing’s spokesman, said: “We want to take the opportunity to bring everyone up to speed with what we have achieved so far and what our future plans are.”
MG Rover collapsed in April 2005, and its assets subsequently were sold by a receiver. BMW AG owns the rights to the Rover car brand.
Nanjing, majority owned by the Nanjing government, is one of about five small Chinese automakers eager to sell vehicles in the United States.
Some analysts question whether the companies have the financial staying power and engineering expertise to sustain global sales and production. They will rely heavily on the expertise of major suppliers to meet global quality, emissions and safety standards.
MG, short for Morris Garages, got its start in 1923 building sporty versions of Morris economy cars. The first MGs came to the United States in volume in 1947 and began the British sports car craze. They were sold at U.S. dealerships until 1980.
Nanjing also plans MG production in China.
MG to return to Longbridge
CHINESE firm Nanjing Automotive has confirmed that it is to go ahead with car production at the former MG Rover factory in Longbridge, which closed last year with the loss of around 6000 jobs.
Nanjing, which has a 33-year lease on part of the Longbridge site, will also build cars in China. The firm is believed to be keen to keep Longbridge because of the paint shop there – an expensive facility which is difficult to move. It is thought that the TF roadster is the most likely candidate for production.
The managing director of Nanjing, Yu Jianwei, is to release full details of the firm’s plans at a press conference before the British motor show later this month.
See the original story at, www.autocar.co.uk.
Back on the road for Rover
Financial Times, 1 July 2006
Nanjing Automobile will definitely go ahead with car production at the former MG Rover car factory in Birmingham, the Chinese carmaker said, James Mackintosh reports from London.
The company will not exercise an option next month to walk away from its 33-year lease on part of Rover’s Longbridge factory, a spokesman told the Financial Times.
Suppliers asked to tender for component contracts had previously been unsure whether Nanjing was committed to the UK. “We will continue the lease,” a spokesman for Nanjing said. He declined to give any details of the production plans ahead of a planned announcement next month. Nanjing paid £53m last autumn for the assets of MG Rover after the company’s collapse, and then spent six months searching for a partner to help restart British production before deciding to go it alone.
The last MG ZTs hit the market
THERE may be no new MGs rolling off the line in either Nanjing or Longbridge just yet, but that doesn’t mean you can’t become the first owner of an unregistered version…
The dealer chain, SMC, which has branches in Slough and High Wycombe is one of the few remaining dealer you can buy a new MG from. The company’s buyer, Mark Baxter, has tracked down the last few unregistered MG ZTs, and is selling them for some very appealing prices.
Mark said: “We have about 35 MG ZT V8s, as well various other versions, and we’re looking to sell them. The real bargains are the standard 260 models, which because they lack the niceties that the SE has, such as Sat/Nav, are being knocked out for just £15,995.”
Considering these cars retailed at over £28,000 14 months ago, when MG Rover was a going concern, this is nothing short of a bargain for what are ‘new’ cars.
For more information, call SMC on 01753 574266 or click on the website, www.smc-cars.com.