AROnline news

Edward Chadwick, Birmingham Post, 31st December, 2009  

William Riley and X Power - ready to hit the skids?

Will Riley boasted less than two years ago how he had a raft of orders for powerful MG X POWER coupés after acquiring the rights to the marque after the collapse of Longbridge. He promised that he would soon be employing 200 workers after ploughing more than £3m into his vision to make 200mph super cars in the Midlands.  

But Mr Riley’s dream now appears to have turned sour after he was arrested on suspicion of theft and battles a bitter war with his staff who say they worked for months without receiving a penny.  

They claim that the tiny MG Sports headquarters in Tenbury Wells, Worcestershire, has never produced a single car and have accused him of putting a David versus Goliath trademarks battle ahead of paying salaries to struggling workers. Mr Riley is also fighting Chinese car giants Nanjing, which bought the collapsed Longbridge firm for £53m, in the High Court for the right to use the famous red octagon.  

Despite the setbacks, Mr Riley told the Birmingham Post he was focused on making cars and denied he had done anything wrong. He said he had been set back by the slump in the motor trade and let down by the same workers taking action against him.  

His solicitors have now issued a counter claim for £16,000 against one former employee for work which had been “unsatisfactorily” carried out. Among the disgruntled ex-staff is Mr Riley’s former right-hand man Tony Cox, who said he was driven to the brink of bankruptcy because of a string of “broken promises” by Mr Riley.  

He will start tribunal proceedings in January to try to claim £13,500 in unpaid wages. “I lost my caravan and nearly lost my house because he didn’t pay us,” said Mr Cox, a former Longbridge worker, who helped to develop the X POWER.  

“If it hadn’t been for the help of my family, the house would have been repossessed. This could have been a great car but the money was never there to develop it. We never built a full car in all the time I was there – all those used in the promotion shots were Longbridge cars which we had tinkered with.  

“He is fighting this battle with Nanjing while we were working without pay.” After a string of adjourned employment tribunals, Mr Cox and Mr Riley are finally set to come face-to-face at a showdown hearing in January.  

Mechanic Jake Allton, aged 62, won £6000 in compensation at an Employment Tribunal against MG Sports and Racing in June for unpaid wages. But the matter is being sent back before a panel after his former boss said he knew nothing about it and failed to turn up and defend himself.  

“I thought we were working on a genuinely exciting project but nothing ever seemed to happen. There were never any parts for us to work with.” Mr Allton, the subject of the recent claim by Mr Riley, said he was not concerned by the threat of action.  

Mr Allton said: “I saw it and I laughed. I’m absolutely astonished because he has never brought it up with me before. If it has taken him this long, I can’t take it very seriously.”  

The arrest for theft relates to the sale of an MG X POWER car to a Toronto businessman last year. The buyer, who does not want to be named, had been working to attract investment for Mr Riley and had accepted the silver car, with a cash adjustment, as payment.  

It was sent back to Tenbury Wells from Canada in early 2009 because the interior was unfinished. The buyer was stunned when he later saw the car for sale in an online auction catalogue. Although it failed to attract the reserve bid in the sale, it was eventually bought but crashed shortly afterwards.  

“Aside from the fact that it has had a financial impact on me, all this has been very embarrassing,” said the Canadian. “I had told people about this car and the idea was that it would come here and I could use it to attract potential investors. ‘I had already put nine months of work in for the company. It was sent back because it just wasn’t in a state where I wanted to show it to people. When I saw it up for auction, my heart dropped.”  

The businessman said he was put off by the costs of civil proceedings to try and recover the costs of the car and was left with no alternative but to go to police in July and Mr Riley was subsequently arrested. He is due to answer bail in February.  

A spokesman for West Mercia Crown Prosecution Service said their file was sent back to the police in October 14 for more information. No decision has been made on whether he will be charged, said a police spokesman.  

Mr Riley said: “I don’t think I owe Tony Cox money, but he is taking to me to tribunal next year. The other matter is going back to tribunal because I was never made aware of the proceedings and could not put my argument forward. Last year we had all sorts of problems which the car industry has felt as a whole and I have been ill on and off for the last 12 months. I’m still very much committed to making cars.”  

Mr Riley’s solicitor, Adrian Harling, said he could not comment on his client’s arrest for theft because the matter was still ongoing. Nanjing, which bought the collapsed firm for £53m in 2005, is seeking an order at the High Court to stop Mr Riley from using the logo and name.  

Mr Riley acquired the subsidiary MG Sports and Racing from Administrators PricewaterhouseCoopers as part of a sell-off of assets. The court was told last month that MG Sports and Racing never had formal consent to use the logo.  

The hearing will continue in the New Year.  

[Source: Birmingham Post]

MG X POWER MG Sports and Racing Europe Limited, William Riley

Jack Rix, Auto Express, 16th December, 2009

In a surprise move MINI has unveiled a brand-new concept car designed as a successor to the famous Sixties Moke. The car is badged the MINI Beachcomber Concept and it’s set to take January’s Detroit Motor Show by storm.

Auto Express was granted an exclusive audience with both the car and its designer Gert Hildebrand at the Magna Steyr factory in Graz, Austria. Hildebrand explained the reason for the location: “For MINI, 2010 is the year of the crossover. Firstly this Beachcomber Concept will be shown in Detroit, then a production version of our Crossover, built here in Graz, will be shown in Geneva before going on sale in the UK in the Autumn.”

So this is far from a wacky one-off show car. Imagine the Beachcomber with doors and a fixed roof and what we have here is actually an early look at how the production version of the Crossman will shape up.

Hildebrand explained the thinking behind his concept: “Under the skin this is entirely the same as the production crossover, in fact the donor car for this project was one of our many prototypes. The reason we chose the Moke as inspiration was not only to give the concept a sense of history, but there’s no better way of showing off the beautiful interior than cutting off the roof and doors!”

Climb on board through the huge side opening and the emphasis is on an active lifestyle. Each seat gets its own symbol depicting an outdoor pursuit, while a compass and a false horizon to the left and right of the steering wheel keeps you pointing in the right direction.

Hildebrand summed up the extravagant interior: “The theme is based around Hawaii and the active lifestyle – hence the volcano red wetsuit material on the seats and the various symbols depicting the different disciplines in the Ironman event. In fact Ironman was a name we considered for this concept.”

The Beachcomber is actually shorter than a Golf hatchback and only ten centimetres longer than a Clubman

Should the weather take a turn for the worse, a fabric tonneau cover can be pulled over the car – this fastens to the windscreen frame, rear panel and the side openings. For more permanent protection, ultra-light plastic inserts can be fitted to form a roof, rear panel and doors.

The styling is reminiscent of the Crossman Concept seen at 2008’s Paris Motor Show, with short overhangs and a wide-set stance. But the Beachcomber’s hexagonal grille borrows its chunky lines from the nose of the Mini Moke. Despite it’s stocky stance, the Beachcomber is actually shorter than a Golf hatchback and only ten centimetres longer than a Clubman.

Rugged wheelarches are filled with 17-inch alloys, which will be available on the production Crossman in a selection of sizes up to 19-inches, and wrapped in deep-grooved run-flat tyres, negating the need for a spare. So, instead of serving its usual purpose, the wheel cover attached to the boot door acts as additional storage. Another clever touch is the rear cross beam – viewed from above, it spells out MINI’s logo.

The level of detail on this concept is astonishing – from production-ready features, such as the centre rail running down the middle of the cockpit, to purely conceptual ideas like the wetsuit upholstery, it’s a concept that serves two purposes. Not only will it excite showgoers in Detroit -  an important factor with America being MINI’s biggest market – but it also tells us loads about the forthcoming Crossman, the fourth addition to the modern MINI family and the most adventurous model yet.

According to Hildebrand MINI’s ambitions over the next few years don’t stop there either: “For the next three years we are already working on three completely new MINIs, the Crossover for 2010 and production version of the Coupe and Roadster concepts shown in Frankfurt for the two years following that.”

[Source: Auto Express]

Gallery

MINI

Clive Goldthorp  

MG6: A vitally important car for the future of the marque in Europe, as well as China.

Alfa Romeo and MG – two of the Automotive Industry’s most historic and iconic, but often troubled, sporting marques – have much in common at the moment. The two brands have probably the most active and dedicated global Owners’ Clubs networks of any OEMs and, while MG enthusiasts have just been celebrating the marque’s 85th Anniversary this year, Alfisti will be celebrating Alfa Romeo’s 100th Anniversary in 2010.  

Alfa Romeo and MG have both chosen to mark their respective anniversaries with the introduction of an important new model which will play a major role in determining whether or not each marque survives and thrives long enough to enjoy similar celebrations in the future. SAIC Motor launched the MG6 at last month’s Guangzhou Auto Show and Alfa Romeo has just confirmed that the new Alfa Romeo Giulietta (formerly referred to as the Milano) will be launched at the Geneva Motor Show next March.  

However, while a spokesman for MG Motor UK Limited has said that the MG6 ‘marks the start of one of the most exciting periods in the 85 year history of the iconic MG brand’ and recently appointed Sales and Marketing Director, Guy Jones, described the launch as ‘a milestone day’ for the marque, the comments made by Fiat Group Automobiles S.p.A. (FGA) CEO, Sergio Marchionne, about the current performance of Alfa Romeo which coincided with the Giulietta’s official World Preview last week, give cause for rather less optimism about Alfa Romeo’s future.  

Marchionne was talking to Automotive News Europe’s Luca Ciferri and his two subsequent articles ‘Money-losing Alfa could face product freeze’ and ‘Fiat mulls putting Chrysler name on Lancia’ made for a thought-provoking read. Automotive Analysts and Alfisti alike had been wondering why there had been little or no mention of Alfa Romeo during the marathon 8 hour presentation of Chrysler Group LLC’s Business Plan for 2010 – 2014 on the 4th November, 2009 but the reason for that omission has now become clear. Marchionne believes that Alfa Romeo has undergone too many reinventions and told Ciferri that: ‘We need to stop doing it. You cannot be a newborn Christian every four years. It’s the same religion, eventually you need to own a religion and carry it to conclusion.’  

Alfa Romeo 159: a replacement may, if approved, use Chrysler's forthcoming LY platform.

FGA’s CEO has therefore initiated a Stategic Review of Alfa Romeo and, according to the first of Luca Ciferri’s articles, the two options for the brand are:-  

1) replacing the 159 with a D-segment range and the 166 with an E-segment range built in North America on Chrysler platforms but unique to and sold by Alfa Romeo on a global basis or  

2) freezing investment in the brand after the launch of the 147-replacing Giulietta next March. The MiTo and Giulietta would be Alfa Romeo’s only up to date models but the 159, Brera and Spider would remain in production for a time.  

The D-segment and E-segment models referred to in 1) above would presumably utilise the latest, heavily modified, version of Chrysler’s rear wheel drive LX platform which was originally based upon the Mercedes-Benz W210 platform and has now, apparently, been re-designated as the LY platform. The LY platform reportedly underpinned the Opel/Vauxhall Insignia-sized Chrysler 200C EV Concept revealed at the North American International Auto Show in Detroit last January and a longer version will underpin the new E-segment MY11 Chrysler 300C.  

However, Sergio Marchionne went on record at the presentation of Chrysler Group LLC’s Business Plan last month as saying: ‘I won’t even tell you the amount of money that the [next-generation] 300 platform costs. You’d be shocked out of your pants, but it’s done and life will move on.’ Marchionne wants to build twenty one different Chrysler and FGA models on only seven basic vehicle platforms by 2014 whereas today the two companies have a total of eleven platforms. The average number of models per platform will increase from 1.9 to 3.0 and the number of vehicles sold per platform will rise from 125,000 to 305,000 so the savings on engineering and development costs should be significant but, even so, Alfa Romeo’s Design and Engineering Teams are likely to have much cost-cutting work to do in order to make a commercially viable business case for the option in 1) above.  

Edd Ellison of the usually well-informed, UK-based, ITALIASPEED.com website has consistently reported that the replacements for the Alfa Romeo 159, Chrysler Sebring and Dodge Avenger were to be based on an extended wheelbase version of Fiat’s Compact (formerly C-Evo) platform dubbed the D-Evo platform (1) but that plan no longer appears to be under consideration and so, by obliging Alfa Romeo to use the more expensive Chrysler LY platform for the 159 and 166 replacements, Marchionne seems to be loading the dice against Alfa Romeo’s medium to long-term survival.  

Another factor militating against the viablility of the option in 1) above may be the emerging European trend towards a consolidation of the D and E-segments as evinced by a comparison between the dimensions of the E-segment MY10 BMW 5-Series and the D-segment Opel/Vauxhall Insignia – the key dimensions of the two models are all pretty much an exact match for each other. Alfa Romeo may not, therefore, need to replace the 159 and 166 with two models but just one…  

Sergio Marchionne’s announcement of the Strategic Review at Alfa Romeo has, of course, prompted much debate about the marque’s future on websites such as AlfaOwner.com. One AlfaOwner.com Forum member noted that many of the points made by Gavin Green in his recent ‘Saab: 1947-2009?’ Blog on Car Online were equally applicable to Alfa Romeo and several others have suggested that FGA should consider a third option: dispose of the IPRs to the Alfa Romeo brand and product range to an OEM with the desire and resources to establish the marque on a truly global basis.  

Intriguingly, Automotive News Europe’s Luca Ciferri has now come to that conclusion himself – in his latest online ‘Inside Europe’ column, Ciferri observes that ‘cancelling new products would kill Alfa in just a few years, so Marchionne would do better to sell the brand before it goes into an agonising decline’ and then suggests that ‘maybe a cash-rich, globally ambitious Chinese carmaker might like to have a brand like Alfa.’  

AROnline therefore wonders whether that ’Chinese solution’ to Marchionne’s Alfa Romeo problem was discussed on an informal basis during Luca Ciferri’s recent interview with FGA’s CEO and reckons that there must, at least, now be a chance that Alfa Romeo will be sold to one of the leading Chinese OEMs. Ciferri does not specify which of the major Chinese OEMs might be interested in acquiring the Alfa Romeo marque but we believe that Guangzhou Automobile Group Co. Ltd. (GAC) may well be at the head of the queue.  

FGA’s parent company, Fiat S.p.A., and GAC have recently won approval from China’s National Development and Reform Commission for the JV which was signed in Rome on the 6th July, 2009 (2). Indeed, according to a report in the China Daily, construction work on the two companies’ new JV facility at Changsha, the capital of Hunan Province, began with a groundbreaking ceremony on the 26th November, 2009.  

However, in addition to GAC’s JV with Fiat, the company has JVs with Honda and Toyota and also announced plans to build a full range of own-brand passenger cars back in 2007. The first such model will reportedly be based upon the discontinued Alfa Romeo 166 platform which FGA sold to GAC in September, 2008 (3) and should hit the Chinese market in 2010.  

Pre-production prototypes of the new E-segment model have recently been spotted on test in China and bear a close resemblance to GAC’s striking VIP Lounge Concept car. Ash Sutcliffe of the China Car Times website reports that one of the two prototypes caught on camera had an ‘A’ badge on the back and reckons that GAC may be planning to launch the car under the company’s Acumen brand but we think that the Alfa Romeo marque would be a rather neat fit with the ‘sports-business’ niche which the new car will be targeting…  

SAIC Motor may have acquired the MG brand as a consequence of the merger with FGA’s original Chinese JV partner, Nanjing Automobile Corporation, but soon realised that the company’s new own-brand products would be more likely to succeed in the global marketplace if they wore the badge of an established European marque like MG rather than that of a new and unknown brand such as Roewe. Acumen may be better suited to the American and European markets than Roewe but Alfa Romeo has so much more charisma and heritage. SAIC Motor and MG might just be setting a precedent for GAC to follow with Alfa Romeo…  

AROnline’s readers may have also drawn another parallel between Alfa Romeo and MG or, more accurately, Rover Group Limited. Sergio Marchionne’s recent remarks reminded observers such as Autocar.co.uk’s Steve Cropley of those made by BMW Group’s then CEO, Bernd Pitschesreider, during the launch of the Rover 75 at the British Motor Show in 1998. However, in Alfa Romeo’s case, FGA clearly intends to complete the Strategic Review and make a final decision about the marque’s future before the Official Launch of the new Giulietta at next March’s Geneva Motor Show so that car might yet have a chance to ‘rise above a bad launch.’  

A final point: Alfa Romeo UK and MG Motor UK’s Dealer Networks are currently of a similar size – Alfa Romeo has 49 Dealers and MG has 40 Dealers. However, while rumours suggest that MG Motor UK has plans to expand the Dealer Network to 100 outlets in readiness for next year’s UK launch of the MG6, Sergio Marchionne’s comments can only generate serious concern about the continuing viability of the Alfa Romeo franchise within an already radically reduced Dealer Network. Interestingly, Christopher Nicoll, the Alfa Romeo UK Managing Director responsible for that restructuring of the Dealer Network, resigned some months ago – his successor, Fiat Group Automobiles UK Ltd’s Managing Director Andrew Humberstone, may well now have a real problem filling any remaining open points.  

Alfisti and MG enthusiasts alike will have to wait and see what the future holds for the two famous marques but 2010 may well prove to be a pivotal year in the respective fortunes of both Alfa Romeo and MG…  

Alfa Romeo Giulietta: sales success will be absolutely pivotal to the marque's future prospects. Just like the MG6...

[Editor's Notes:  (1) See the following ITALIASPEED.com articles: 'Fiat architecture plans for Chrysler quickly taking shape' 14th June, 2009, 'Chrysler Group 2010 - 2014 Business Plan: Chrysler' and 'Chrysler Group 2010 - 2014 Business Plan: Dodge' 5th November, 2009 for more information. (2) See the following just-auto.com article: 'ITALY: Fiat inks car and engine JV with Guangzhou' 6th July, 2009 for more information. (3) See the following ITALIASPEED.com article: 'Guangzhou confirms platform talks with Fiat' 1st October, 2008 for more information.]

SAIC Motor Alfa Romeo Giulietta, Chrysler LY platform, FGA Compact platform, MY11 Chrysler 300C

Jaguar Land Rover North America has just announced that the Jaguar and Land Rover brands have achieved the first and fifth highest scores respectively in the industry for customer sales satisfaction in J.D. Power and Associates 2009 Sales Satisfaction Index (SSI) Study^SM. 

Jaguar is the highest scoring brand in the study for the second consecutive year, and the recipient of the inaugural Luxury brand award. Land Rover is ranked fifth among luxury brands in the study.

The study is a comprehensive analysis of the new-vehicle purchase experience and is based on responses from over 48,000 owners and lessees of new vehicles registered in May and June of 2009. Overall customer satisfaction is measured based on five factors: dealership facility; salesperson; paperwork/finance process; delivery process; and vehicle price.

“Jaguar and Land Rover dealers deserve individual and collective praise for delivering such a superb shopping and buying process for our customers,” said Gary Temple, President, Jaguar Land Rover North America, LLC. “The top goals of this organization are to deliver world-class quality products to our customers with a world-class dealership sales and service experience. These high rankings out of 37 brands in the industry coupled with recent dependability and customer service accolades show all of our efforts towards these goals are paying off.”

[Source: Jaguar Land Rover North America]

Jaguar Land Rover Gary Temple, J.D. Power and Associates, Jaguar Land Rover North America

Jaguar’s UK sales in November have risen by 50 per cent compared to the same month last year with a total of 1463 models sold.

This success has been led by both the XK and XF models – with sales increasing by 78.4 per cent and 149 per cent respectively for the month.

Geoff Cousins, Managing Director, Jaguar UK said: ‘The momentum for XF just keeps on going. We have now sold more XF models so far this year, in its second year in showrooms, than we did at the same point in 2008, when we launched. Selling 9128 XF so far this year compared to 8462 sales year to date in 2008 is a great result. This result highlights the demand we continue to see for XF in our showrooms following the introduction of the excellent new 3.0-litre diesel engine.

‘The success of both the new XF and XK models demonstrates excitement and interest in the new range of Jaguar cars. I am delighted these figures reflect a step forward for Jaguar UK within a challenging market and I expect it to continue when the new XJ joins the line-up in 2010.’

[Source: Jaguar UK]

Jaguar Geoff Cousins, Jaguar XF, Jaguar XK

Automotive News Europe, 4th December, 2009

SHANGHAI (Reuters) – General Motors will sell a 1 percent stake in its existing China venture with partner SAIC Motor for about $85 million, giving China’s top carmaker control and allowing it to consolidate the venture’s accounts onto its balance sheet.

GM and SAIC Motor also announced that they will make small cars and commercial vehicles in India, taking their 12-year partnership into one of the world’s fastest-growing auto markets.

“We have had a successful relationship with them for 12 years,” Nick Reilly, the outgoing President of GM’s International Operations, told reporters on a conference call on Friday. “It seems to us very sensible and a big opportunity to broaden that relationship outside China.”

The 50:50 India venture, in which SAIC Motor will invest cash and GM will inject existing Indian assets, aims to sell 225,000 vehicles a year in the next couple of years, Reilly said.

SAIC makes its move

For SAIC Motor gaining control of the China venture and an equal say with GM in India could be a stepping stone to its ambitions of being a global player in an autos market that has suffered one of its deepest downturns in memory.

“India is a test case of SAIC’s ambition for overseas expansion, and it may further expand into Southeast Asia when the time is right,” said Johnny Wong, Auto Analyst at Yuanta in Hong Kong.

The GM-SAIC Motor partnership is one of the most successful tie-ups between a foreign and local automaker in China, helping both companies in a fiercely competitive market where they vie with Volkswagen AG, Toyota Motor Corp. and Ford Motor.

“It seems to me that SAIC’s status in the tie-up is obviously rising,” said Qin Xuwen, an Analyst with Orient Securities. “The tide has started to turn. They are equal partners now.”

GM India said its U.S. parent would collaborate with SAIC Motor to develop and make commercial vehicles and other products both for India and for export, mainly to emerging markets.

“It looks like GM is leveraging all its contacts across the globe to expand in fast-growing markets, and for SAIC it gives them a ready market into the fourth-largest commercial vehicle market,” said Ian Fletcher, London-based Auto Analyst at IHS Global Insight.

The India collaboration, which should be finalized soon, would have access to mini-commercial vehicles and other products from GM’s venture in China, and would vie with local automakers such as Tata Motors Ltd. and Mahindra & Mahindra.

Shortcut to goal

For years, Chinese automakers have been churning out foreign brands through local tie-ups with VW, Toyota and others or have focused their own production on basic and cheap models aimed only at the fast-growing domestic market.

Snapping up assets from distressed auto giants offers them a shortcut to global markets and helps them raise both their technical expertise and their profile.

The deals with SAIC Motor come as GM has opted to retain and turn around its Opel operations in Europe in a restructuring estimated to cost about 3.3 billion euros, reversing a decision to sell a controlling stake in the unit.

GM had a cash hoard of nearly $43 billion at end-September thanks to $50 billion of U.S. Government support that has made the U.S. Treasury a 61 percent owner, but the company has made it a priority to repay debt to U.S. taxpayers quickly, possibly as early as June.

Earlier this week, GM’s CEO Fritz Henderson abruptly resigned after the company’s board decided the automaker needed to push its restructuring faster under new leadership.

On Thursday, SAIC Motor suspended trading in its shares on the Shanghai market pending an announcement on what it called a “major asset restructuring.”

SAIC Motor President Chen Hong has previously said the company was very interested in entering the Indian market and listed it as second in terms of potential after China.

There is very little Chinese presence in the Indian auto sector. There are a number of ventures between Chinese and Indian firms making electric two-wheelers, but these are tiny.

Bilateral trade between India and China has grown in recent years but New Delhi, worried about security risks, has taken steps to regulate the entry of Chinese investments and workers.

Key market

China’s auto market has been a major bright spot this year amid a steeper-than-expected global industry downturn, thanks to Beijing’s stimulus measures, which have significantly bolstered consumer confidence. GM has been one of the biggest beneficiaries.

January-October sales at GM’s Shanghai venture with SAIC Motor rose 46.5 percent to 548,707 vehicles. The decade-old flagship venture with SAIC Motor sells passenger cars under the Cadillac, Buick and Chevrolet brands.

GM in its global restructuring opted to retain Buick due to its popularity in China while it was closing or selling other units such as Saab, Saturn and Hummer. The China results are in contrast to GM’s home market, where sales fell 32 percent through November to about 1.9 million vehicles.

In a sign that Beijing Automotive Industry Holding Corp (BAIC) might still be keen to buy GM’s Saab unit, Bank of China said it provided BAIC with a 20 billion yuan ($2.9 billion) line of credit. The Beijing-based carmaker has said it might still be interested in Saab.

GM and SAIC Motor have many other joint ventures in China as well, including an automotive finance firm modeled after GMAC and a three-way commercial vehicle tie-up with Lizhou Wuling Automobile. GM’s joint ventures in China sold a combined 1.46 million units through the first 10 months of 2009.

[Source: Automotive News Europe/Reuters]

China Watch Chen Hong, General Motors, Nick Reilly, SAIC Motor, Shanghai GM

Automotive News Europe, 3rd December, 2009

SHANGHAI (Reuters) – Volkswagen AG and General Motors Co. partner SAIC Motor, China’s biggest automaker, said on Thursday it suspended its trading on the Shanghai Stock Exchange as it plans a major asset restructuring.

SAIC Motor said it would hold a board meeting before Dec. 9 to discuss the restructuring, and its shares would resume trade after the details of a planned restructuring have been announced.

The trading suspension spurred speculation that the Shanghai-based automaker was in talks with GM or other partners over their Chinese joint ventures.

VW set up 50-50 joint venture Shanghai-Volkswagen Automotive Co. Ltd. 25 years ago. The partners’ product range includes a total of 11 models ranging from the VW Polo, Santana and Touran to the Skoda Fabia, Octavia and Superb.

SAIC Motor and GM are 50-50 partners in Shanghai GM, the maker of Cadillac, Buick and Chevrolet models, while SAIC-GM-Wuling is a three-way tie-up between SAIC Motor, GM and Liuzhou Wuling Automobile, which makes popular minivans and small trucks.

GM, which currently holds a 34 percent stake in SAIC-GM-Wuling, has been seeking to increase its stake in the venture – SAIC Motor owns 50.1 percent and Liuzhou Wuling 15.9 percent.

SAIC Motor and GM have also been exploring business opportunities in India, another major auto market with great potential, SAIC Motor President Chen Hong told reporters recently. SAIC Motor’s spokeswoman declined to comment on market speculation.

GM said in a statement it was constantly holding discussions with its partner to ensure that both companies were improving and prepared for the future.

SAIC Motor’s shares have more than quadrupled this year, leading a roughly 80 percent gain on the benchmark index.

[Source: Automotive News Europe/Reuters]

China Watch SAIC Motor Corporation Limited, Shanghai General Motors Company Limited

MG Rover's K-Series engine

MG Rover parts specialist XPart now offers the best known aftermarket solution for head gasket repairs on K-series engines

Technicians tasked with replacing head gaskets on MG Rover K-series engines now have access to the new Multi-Layer Steel (MLS) Gasket Kit from XPart, designed to be the most efficient and durable solution to date for MG Rover K-series engine repair. XPart has developed the kit utilising the engineering expertise at Shanghai Automotive Industry Corporation (SAIC), which employs many former MG Rover engineers at Longbridge. The company will distribute the kit via its nationwide network of wholesalers and AutoService centres.

“After a period of thorough testing we are convinced that the latest MLS Gasket Kit offers technicians the best known fix for head gasket replacement,” comments Don Lindsay, Service Marketing Manager, XPart. “It should prove popular among MG Rover, Caterham and Lotus owners using K-series engines, and offers a sophisticated, reliable option for the replacement of head gaskets.”

After a period of thorough testing we are convinced that the latest MLS Gasket Kit offers technicians the best known fix for head gasket replacement. It should prove popular among MG Rover, Caterham and Lotus owners using K-series engines, and offers a sophisticated, reliable option for the replacement of head gaskets.” Don Lindsay, Service Marketing Manager, XPart

In designing the new kit, XPart and SAIC have used a combination of the revised lower oil rail designed by MG Rover engineers, higher tensile 10.9 grade long stretch bolts and a new single piece multi-layer steel gasket engineered by SAIC for its new N-series engine. The gasket should not be fitted in isolation and it is the kit together with revised torque settings that provides the best known repair. The XPart parts warranty only applies when the full kit has been used.

“The Rover 25 we used to trial the latest MLS gasket has now covered many miles as a heavy use courtesy car and I have complete confidence that in line with all of our other MLS gasket equipped cars, it will continue to give reliable service for the remainder of its life”, explains Patrick Warner, Managing Director, Sterling Automotive Limited. “We have been using MLS head gaskets for over two years with a 100 percent success rate. The latest kit from XPart helps make this even more affordable for customers. We would recommend fitting the MLS gasket set which comes with a strengthened lower oil rail and new head bolts, as well as a water pump.”

XPart will continue to offer the original K-series components as part of its MG Rover Original Parts range and envisages this kit as being particularly popular amongst enthusiasts and car restorers.

XPart Don Lindsay, K-Series HGF, MLS Gasket Kit, Sterling Automotive Limited, XPart AutoService Centres

David Bailey, Birmingham Post, 29th November, 2009

After being clobbered by the double whammy of recession and credit crunch, it’s wonderful to see JLR back in the black (in operating terms at least) with some excellent results. Indeed, so much so that it will be fun to watch some of the teenage scribblers in the London business press digest this after roundly slagging off the firm earlier this year (they should get out more and understand manufacturing better).

The Tata-owned but Midlands-based firm has made an operating profit after aggressive cost cutting and a rise in sales. The latter has been boosted by improvements in markets like China and the UK  and also through sheer hard work by the firm. Its 2010 range of revamped Range Rover, Range Rover Sport and Discovery 4 is doing well. Meanwhile, the stunning Jaguar XF takes on all-comers and the real benefits of the XJ are yet to come.

JLR sales rose by nearly a quarter to 23% to 44,300 vehicles, up from 35,000 in the previous quarter. The UK market was the surprising star of the show, with sales up by a third to 14,400 vehicles (with confidence more generally boosted by scrappage of course), while Chinese sales grew by 2.1% to 3,400. North American sales fell by 7.3% to 9,600 as consumers continue to switch to smaller, more fuel efficient cars. The latter shows how important JLR’s £800 million investment in green technologies really is and how key the LRX (a lightweight hybrid ‘baby’ Range Rover) will be.

JLR’s Indian parent, Tata Motors, stated yesterday that JLR made an operating profit of £41 million in the three months to 30 September, as compared with a loss of £34 million in the same quarter last year ago. JLR’s overall net loss narrowed to £60 million from £240 million in the comparable period last year. This is quite a turnaround.

JLR sales rose by nearly a quarter to 23% to 44,300 vehicles, up from 35,000 in the previous quarter. The UK market was the surprising star of the show, with sales up by a third to 14,400 vehicles (with confidence more generally boosted by scrappage of course), while Chinese sales grew by 2.1% to 3,400. North American sales fell by 7.3% to 9,600 as consumers continue to switch to smaller, more fuel efficient cars. The latter shows how important JLR’s £800 million investment in green technologies really is and how key the LRX (a lightweight hybrid ‘baby’ Range Rover) will be.” Professor David Bailey, Coventry University Business School

Ravi Kant, Vice-Chairman of Tata Motors, said that “lot of restructuring is happening. The impact of these restructuring measures is still to kick in… we have created national sales organisations in all the countries where we sell Jaguar Land Rover. And all the new models are high margin products”. Tata’s Chief Financial Officer added that “most of the cars sold during the quarter were higher margin cars, which is why the fixed marketing costs got reduced… many of the cost reduction measures underway in JLR should benefit us in coming quarters.”

Tata brought in KPMG and Roland Berger Strategy Consultants to cut costs at JLR. The firm has laid off over 2000 workers since the start of the recession, has cut pay for new staff by up to 20%  and – with the help of its workforce – has agreed a temporary wage freeze. It has also announced plans to close one of its West Midlands factories by the middle of the next decade (rumoured to be Castle Bromwich), outsource production overseas and close its final salary pension scheme to new members.

The firm has recently secured over half a billion in funding from overseas – with some £175 million coming in loans from the State Bank of India and another £170 million from GE Capital. Under the latter, JLR will be able to draw down cash as soon as its cars roll off production lines, in turn boosting the firm’s working capital by shortening the 30- to 40-day gap it has to wait between producing cars and delivering them to dealerships.

Interestingly, the State Bank of India is – as the name suggests – state-owned, while GE Capital received US Government backing for its debt when the credit markets imploded last year so, in effect, we see two foreign state-owned or backed banks supporting JLR. It’s a shame the (mainly state-owned) UK banking system hasn’t been able to do so on similar terms.

By the way, in the future, I’d like to see more investment in UK industry by British state-owned banks and rather less effort spent investing in dodgy Dubai property or backing hostile takeovers of British success stories like Cadbury. Our banking system needs to be run in the interests of businesses and households, as John Clancy and I have repeatedly pointed out in our blogs.

JLR has also said that it is in the process of finalising private sector guarantee arrangements to access a £340 million loan approved by the European Investment Bank. This was something the firm was trying to negotiate with the UK Government but found the terms on offer so onerous that it walked away.

Despite all that, hats off to JLR for a strong set of results. The firm has got on with the job in hand of developing wonderful products and cutting costs to compete internationally – without much in the way of government support. There’s more to come as the firm has an excellent product pipeline. It will need one if it is to maintain employment in the Midlands – as JLR management genuinely hopes – when it goes from two plants to one in a few years’ time.” Professor David Bailey, Coventry University Business School

One loan under the Automotive Assistance Programme that we thought was going ahead was the £10 million loan to Tata to develop its European Technical Centre here in the Midlands at the University of Warwick (the centre was set up in 2005). Lord Mandelson announced the loan last month, saying that Britain was backing Tata’s research into electric cars. However, the Indian financial newspaper The Economic Times today reports that Tata has again said “thanks but no thanks” and that it doesn’t want the money as it can get better terms from commercial lenders.

The money was going to be used to develop an electric version of one of its existing models. Let’s hope that the development work  and, ultimately production of electric cars, will go ahead in the UK despite the lack of accessible funding support from the UK Government. This is an area where the UK really can compete if we invest in new technologies.

That also leaves me scratching my head as to how much money has actually been spent under the £2.3 billion Automotive Assistance Programme. I get the impression that it’s peanuts so far, despite the huge downturn in the industry we’ve seen and the 30,000+ job losses that have been experienced in the sector.

Despite all that, hats off to JLR for a strong set of results. The firm has got on with the job in hand of developing wonderful products and cutting costs to compete internationally – without much in the way of government support. There’s more to come as the firm has an excellent product pipeline. It will need one if it is to maintain employment in the Midlands – as JLR management genuinely hopes – when it goes from two plants to one in a few years’ time.

[Source: Birmingham Post]

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

Jaguar Land Rover Automotive Assistance Programme, JLR, KPMG, Lord Mandelson, Ravi Kant