Blog : An American ally for Guy in Shanghai?

Carole Nash Classic Insurance Specialists

Clive Goldthorp

Guy Jones: 'In terms of Europe, MG UK and SMTC UK are playing the key role in designing, engineering and planning the launch of MG products for Europe'
Guy Jones

Every Automotive Industry executive and petrolhead in the world will have their eyes on the North American International Auto Show (NAIAS) in Detroit this week. However, while Kia Motors Corporation may be wowing the crowds in Motor City with the Kia Design Centre America-penned GT4 Stinger 2+2 sports car concept, as AROnline’s US Editor (and Automotive News Engineering Reporter), Detroit-based Richard Truett, has already implied in his latest Blog: Why the USA isn’t yet ready for MG’s return, such a high-profile presence at the NAIAS probably remains but a distant dream for the SAIC Motor-owned MG marque…

A recent MG Motor UK Press Release highlighted the fact that SAIC Motor achieved record global sales of 5.1m vehicles in 2013 – that represents an increase of 13.71 per cent over 2012 – and became the first Chinese OEM to sell more than five million units in a year. Interestingly, global sales of SAIC Motor’s own brands, MG and the China-only Roewe, stood at 235,020 units. These numbers clearly demonstrate why SAIC Motor has the financial clout to ensure that MG becomes a truly successful global brand again and, over time, to record a massive increase in sales of the company’s own-brand models.

Indeed, as the Birmingham Mail’s Gary Young reported last week, MG Motor UK ‘[is currently] in discussions with importers from mainland European countries’ and appears on course to re-launch MG in the right-hand drive markets of Cyprus, Malta and the Republic of Ireland during 2014 as a precursor to subsequent expansion in the Benelux and Scandinavian countries – SAIC Motor does, then, seem to have MG’s sights set on European market expansion in the near-to-mid-term. However, in the mid-to-long-term, no truly global OEM can afford to ignore the North American market…

Okay, so what, then, does SAIC Motor need in order to maximise the prospects for a successful re-launch of MG in the USA? Well, our man Truett was pretty unequivocal: a proper rear-wheel drive, two-seater roadster targeted at the Mazda MX-5 and ‘a strong leader with vision and a company willing to give him the long-term financial backing and freedom to execute it.’

KIA GT4 Stinger

Hopefully, some members of SAIC Motor’s MG Sales and Marketing Team in Shanghai will be at the NAIAS monitoring the overwhelmingly positive impact on the perception of the Kia brand which the GT4 Stinger Concept car (above) has generated – even if they are not, then surely the media coverage and Internet chatter about the car cannot have escaped their attention…

Kia Motors Corporation has, at this stage, merely stated that, ‘while there are currently no plans to bring the concept to production, Kia has a history of delivering production vehicles that bear a strong resemblance to the concept that preceded them, and the GT4 Stinger provides a possible and highly provocative glimpse into Kia’s future.’

Damion Smy of CAR Magazine, though, reckons that ‘it’s expected that the GT4 Stinger will be in showrooms in 2016 if it’s given the green light for production’ while Steve Fowler of AutoExpress suggests that a production version ‘could be on sale by 2016 and be priced under £30,000.’ Fowler also quotes Tom Kearns, Chief Designer, Kia Design Centre America, as saying: ‘I’d be okay with a convertible version. What do you think?’

Well, as AROnline’s resident – if only occasional – punter, you would not find me betting against those predictions coming to fruition… Seriously, if Kia Motor Corporation recognises that a £30,000 rear-wheel drive, two-seater roadster can become a brand-building halo model for the rest of the Kia range, then SAIC Motor must surely see the potential for a competitor from MG and  be seen to be doing something about that.

However, that still leaves Richard Truett’s second point about the need for ‘a strong leader with vision’ to be addressed. Well, AROnline’s regular readers might remember an article by Keith Adams, from back in March, 2013 entitled Blog: Why MG appears to have a lot to learn from Qoros – Keith observed that Qoros’ Design Team was led by ex-Volkswagen, Seat, Mitsubishi and MINI man, Gert Hildebrand, and that the Engineering Team was ‘like a Who’s Who of Jaguar Land Rover men, too.’

Interestingly, a quick look at Qoros Automotive Company Limited’s website reveals that several key members of the company’s Shanghai-based Sales and Marketing Team are also Westerners – people like Executive Director of Sales and Marketing, Stefano Villanti, Director of After Sales, Kevin Phelps and Director of Sales and Marketing – Europe/ME, Cristiano Carlutti…

SAIC Motor promoted a Brit, Tony Williams-Kenny, to the role of Design Director for MG and Roewe in January, 2011 while MG Motor UK’s Sales and Marketing Director, Guy Jones, leads the Sales and Marketing Team here in the UK and will be masterminding MG’s forthcoming move into Europe. However, if the company really does aim to establish MG as a truly global marque, perhaps – just perhaps – the input of an experienced Westerner might benefit the Sales and Marketing Team in Shanghai – maybe SAIC Motor should follow Qoros Automotive’s lead there…

John Krafcik

Ironically, Christopher Sawyer, AROnline’s other US-based Contributor, might now have put a name in the frame for any such new and additional role at SAIC Motor in Shanghai. Christopher founded and runs The Virtual Driver online motoring magazine – the latest edition includes an article entitled Hyundai’s Revolving Door which gives a characteristically revealing insight into the recent departure of Hyundai Motor America’s now former President and CEO, John Krafcik (above). Automotive News has already tipped the highly-regarded Krafcik for one of four potential roles in the US Automotive Industry and even identified him as a potential successor to Sergio Marchionne as CEO of the soon-to-be merged Fiat Group Automobiles S.p.A. and Chrysler Group LLC – Fiat S.p.A. Chairman, John Elkann, has now stated that Marchionne will remain in post until at least 2017 but he might, one supposes, decide to retire at that point.

Marchionne may already be on the lookout for someone with a Krafcik-like CV to mastermind his fourth attempt to re-launch the Alfa Romeo marque – after all, the success of that in North America will be a vital element in the future growth and survival of the new, post-merger company. However, a savvy SAIC Motor with long-term ambitions to take MG back into America as well as Europe might well be wise to consider creating a new role for Krafcik before the likes of, say, Marchionne or Tesla Motors, Inc’s. Elon Musk make a move.

Mind you, all that, of course, depends upon whether or not Mr. Krafcik would be up for the job and a move to China…

Clive Goldthorp

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.

37 Comments

  1. IF SAIC are such big players and are serious about MG then they need to understand a loss leading MG roadster is what they need to kick start MG properly not only for America but for everywhere. It would give them all the free publicity they need but unless its UK or US built it wouldn’t have the cache and credibility. And that is something I doubt they have the stomach to pay for or understand even though they have the talent,skill and facilities in the design and engineering team here.

  2. I still don’t understand, given that GM tied up with SAIC in China, why they can’t leverage this to use GM to promote MG in international markets?
    They did use GM for finance though IIRC.

  3. An MG roadster built in the US, now that would really be funny, until they start selling cars in Europe in sufficient numbers to justify a major spending spree on a car that is very limited, then, it wont be happening for a long time, well, not until the new SUV and other models have arrived.

  4. (China Car Times) sales figures for Chinese market in 2013;

    Roewe 155,336 – 29th largest brand
    MG – 79,684 – 43rd largest brand

    If SAIC can’t get their brands to work better in their own home market why should they bother in overseas markets?

    BTW, these rumours of the Shanghai brand being used for the 750 and 950 are apparently in part so that an updated 750 can be introduced any time now – there’s life in the old 75 yet…

    While looking at JLR people at Qoros it might be worth also looking at ex-Rover people going to senior positions in Tata…

  5. @4 There are lies, damned lies and statistics.

    SAIC sold over 5 million vehicles, that’s all we need to know.
    What comes of MG is SAICs decision, not loads of us speculators.

    We argue this every which way, week in, week out.

    And Longbridge is still open.

  6. @ jagboy
    “An MG roadster built in the US, now that would really be funny”

    ….about as funny as a 4 cylinder Mustang…alex

  7. Long term Chinese domestic brands need to expand into other markets, SAIC may well sell 5 million vehicles but most are VW or GM in origin and if SAIC want to do this they need to start thinking about making unfavourable models to their domestic market like sports cars and diesel engined vehicles. There are new models in the pipeline, an MG5 saloon is due soon and once the MG3 hopefully starts using the GM sourced three cylinder unit it will become a more saleable vehicle in established markets but to break into the US market MG should look at a cheap sports car model to give prospective customers something they expect from the company rather than a range of saloons that mean nothing to most Americans.

  8. @8
    True and the new 4 cylinder EcoBoost 4 Mustang is as relevant today as any model from the sixties and seventies.
    Nothing wrong with building cars in America particularly as MG sports cars flooded into the States before lack of investment took its toll.

  9. Why build it in the US when there is A LOT of spare capacity at Longbridge? Even if US was a potential market for a new sportscar from launch, the UK would already have a small but established sales network, and then theres the heritage of MG being a UK brand and the UK being the centre of world motorsport.

    Longbridge would be the only place to build a new MG sportscar.

    What price though? At £30,000 like the Kia Stinger they would struggle – it would need in my opinion to sell from £20,000. A 2+2 coupe would be as important as a roadster too.

  10. @3 Ha ha funny – yes the very idea of a European sports car built in America! Oh, hang on a minute – what about the BMW Z3 and Z4… The thing is that where the car is built is not always as critical to the customer as most people think. I appreciate that “made in China” might be a negative for US customers, but nobody bats an eyelid at American Bimmers or ones from South Africa. I think that an MG sports car built in Britain and sold in North America would work well. Later they could have a factory in the US or Mexico.

  11. @11 forgive me my heresy but I do not see Longbridge as the “only” UK option. They could set up a amall dedicated unit somewhere such as – I dunno – a little place called Abingdon on Thames? After all a lot of the carefully crafted MG mystique came from that magical connection.

  12. Another good article by Clive. The argument for not doing a new MG sports car looks all the more silly when you see how many other car makers are creating such things. Of course Guy Jones used to work for KIA in the UK so he doubtless knows as bit about how they tick. If those pesky Japanese and Korean car makers are making some great sports cars, then why not a Chinese one? The Chinese one would, at least, have one of the most evocative sports car brand names short of Aston Martin, Jaguar or Porsche…

    Yes, obviously MG needs to build large numbers of solid revenue-earning products like the MG3, MG5, MG6 and the new SUV(s). The days of just one model – MG RV8 or MGF – are long gone. But SAIC have the cash behind them and perhaps enough courage to decide that they need to ‘do’ an MG sports car not some time after these other models have gone on sale but NOW before it really does become too late.

  13. @16 or build enough of a business that there are enough jobs in more than one location. A good business is not solely about keeping jobs somewhere (even if that is clearly critical for the people in the particular country who want or need the employment) but is also about making the products in a cost effective way that allows them to be sold at a sensible unit cost. If, say, MG were to start off building sports cars in the UK and exporting some to the USA, but eventually found they were selling so well that they needed to add a factory in the Americas, perhaps using some assemblies made in say the UK, would that be such a bad thing in your eyes?

  14. if you see the news about china and there new attitude to other nations near by like clameing more sea area ,building up there armed forces,if they start fighting will we still be able to get cars from them,

  15. I just thought that I would add, that as a far as I know the MG6s on sale in New Zealand(not sure if they have sold any) are Chinese built ones not Longbridge ones. so I would be surprised if they start building MG’s in the states. alex

  16. @20 would you be ‘surprised’ no doubt at BMW, VW or Mercedes building cars there, or Hyundai having a design facility there? In Nissan building cars in the UK? My point is that the idea of a MG production line in the USA could be an aspiration for eventual realisation. Clearly it probably wouldn’t happen any time soon. The idea of a US facility was something talked about by a few in British Leyland way way back but Lord Stokes wasn’t keen when he had Leyland Australia to worry about.

  17. David I know about most of those factories (especially the UK Nissan one), but, I think generally the Chinese are keen to look after their own first, they have strong sense sell Chinese stuff and look after Chinese people, sure they do like partners and some “arrangements” but If they can get away with exporting cars from China to the US, I am sure that’s all they will do ….and I cant say I blame them. The need for a factory(s) is more likely to come out of what their “arrangements” with GM are 🙂 Alex

  18. David – you mentioned the Leyland Australia problems, you might not know but Both Ford and GM (Holden) have both announced in the last year that they are soon ceasing production of ALL cars in Australia and cars will be sourced elsewhere (presumably from Asia and possibly the US) and of course Europe (Ford F+F+M). I think this is a great shame as in my opinion the Holden Commodores) in particular are great cars and one of the best looking cars (especially the VE previous model in the world, and are exported from Australia to NZ, USA, Great Britain (Vauxhaul VX things) Dubai etc. See Vauxhall VXR8 and Insignia and the UTE. Cheers Alex (NZL)

    http://www.stuff.co.nz/motoring/news/9505091/Holden-to-cut-Australian-production

    http://www.stuff.co.nz/motoring/8708396/Ford-confirms-Australian-plant-closures

  19. @22 I’m sure you’re right Alex about the Chinese preference for exporting from their own factories. However I suspect that exporting cars from China direct to the USA would probably be a step too far for the time being – more from an American perspective on Chinese cars than any basic commercial logic. Sending exports from, say Longbridge, to North America might be more viable but I’d still maiantian that a clever solution in the medium to longer term, if the sales truly pick up, could still be a factory somewhere in the Americas. Whether or not this fits within the Chinese psyche and business model I just can’t tell.

  20. To reset a few facts, BMW moved all Z4 build from here in the US to Germany a while back, to free up capacity to make yet more SUVs for the insatiable American market. SAIC would have to outdo Mazda and sell cheaper than the Miata/MX5 to shift MG roadsters here. While that would be really sweet, I would think SAIC to be more capable of delivering a cheaper (or maybe funkier?) Nissan Juke-type SUV. That seems much more feasible than a roadster given the platforms at SAIC’s disposal.

  21. @26 you’re obviously right about the changes at Spartanburg; my point was that even BMW build vehicles in the USA and presumably most customers neither know nor really care. They are buying a premium German product as far as they are concerned. I think you may be right about a “budget” sporty SUV but this begs two questions. One is whether Americans would embrace an MG SUV and secondly, the emphasis on “budget” is of course a polar opposite to where, arguably, a canny car maker should be taking their product unless they want to pile them high and cheap, which means builsing them in big numbers to sell against non premium rivals

  22. @23 Sorry I missed your post Alex. Yes, I had heard the sad news about Ford Australia and Holden. They are both supposedly victims in part of the strength of the Oz Dollar but in my view that kind of stance is sometimes a convenient excuse for the parent company. Clear out the parts of the business which need investment to make them work properly over the near term and blame the politicians, who nearly everyone hates! Boo! Hiss! It’s all their doing! Meanwhile, GM/Ford HQ get to write down investment and reduce remote manufacturing and management costs, spending it elsewhere where the returns are more obvious. I imagine that for future Holden and Ford sales in Australia and New Zealand it will be fully-fledged imports from China, Korea and Thailand? Are they trying to kill off the classic Australian V8 or do they hope to import fully built cars from North America to satisfy the latent demand? What will race at Bathurst? How will they square local brand loyalty that surely stemmed to an extent from a degree of patriotism and the unique local market demands? Are the politicians saying or doing anything constructive in thus context (scratch that question, I can guess the answer). Does this mean the end of the Vauxhall VXR8?

  23. David I think the bottom line is that the “falcon” units sold in 2013 was under 30000 vehicles and the commodore roughly double that (because they export holdens to countries other than NZL). The crossover SUV market has hit them both hard. the Ford territory is a nice car but pricey, and the Holden SUV is UGLY ( I think its some rebadged Korean thing anyway). NZ cops don’t buy falcons anymore because they need Fixing Or Repairing Daily (F.O.R.D). So im not terribly surprised they are pulling out. But- I think that before too long most cars will come from China anyway. As has been written on this website before – Japan will be where Britain was 30 years ago. alex

  24. State laws mostly prevent selling direct.Launching a single model (Chinese roadster)dealerships in the US?

    Pontiac – Dead, who knew you can’t make money rebadging Holdens?
    Hummer – Dead
    Saturn – Dead
    Isuzu – Dead
    Suzuki – Dead
    Lotus – In ICU
    Mitsubishi – Coughing up blood.
    Scion – Passed out in toilet.
    Mazda – Sold off by Ford now a niche brand.
    Fiat – If it weren’t for the Chrysler connection and sales channel they would be dead.

    Look at a map of the US sometime.

  25. @30 yes, good list. Add in perhaps:
    Plymouth
    Mercury
    Oldsmobile

    My thinking about MG was certainly not to sell a single model (i.e. MG Roadster) but build a model range which is suitable for sales in North America (i.e. probably none of the current offerings) which could include more than one sports model (i.e. ‘MG Midget’, ‘MGB’ and ‘MGB GT’ for want of an analogy) but also bigger sellers such as an SUV and maybe, just maybe, the next generation of one of the sedan/hatch models. To do this would take time and money but if done properly, it would be worth it – provided the ‘brand offer’ was pitched correctly. But to set the scene, if the development of an MG roadster was ‘ramped up’ – maybe starting off with a ‘limited edition’ exercise – then the whole marketing plan could be made to stick together.

  26. @31

    Maybach as well ;-\

    There is no market for lower priced small roadsters here. Mazda best year they sold almost 17,000 in 2006. Nowadays they do around 7,000 a year, even now you can buy a leftover new 2013 for around $20,000. For a US population of 300 million that isn’t much.

    Ford cancelled their Ranger pickup in 2012, even though they typically sold 40,0000 – 50,000 per year and the truck been in production with various upgrades for almost 30 years.

    Old – GM had the Solstice/ Sky roadster, Toyota had the MR2, Ford had the Mercury Capri in the 90s.

    And since MG UK can’t seem to crack triple digits any month it’s a pipe dream.

    Ford sells that before breakfast.

  27. @32 Good points, well made. Reliance solely on USA sales would not make sense. So sell some to Brit Expats in Canada as well as to Anglophile markets elsewhere! Yes, it seems a pipedream if measured against current sales performance in the UK but that isn’t the reason to cop out of a global sales ambition. Clive Goldthorp and I wonder what became of the IPR for the Solstice platform as there could be worse starting points.

  28. Today the boss of Volvo said he didn’t see a big problem selling Chinese built Volvos in North America… Class please discuss! 🙂

  29. US customers don’t seem to buy hatchbacks unless they are throw-away vehicles or VWs.

    There are about 40 vehicles in our company parking lot. 3 are hatchbacks, 1 KIA, 1 Honda, 1 VW GTI.

    Like the Fiero in it’s final form the Solstice was not a bad effort however the convertible top was badly designed. They didn’t sell well. Not sure why GM didn’t rebrand the Sky as a Chevy after the crash – probably because moving the tooling to another factory wasn’t cost effective.

  30. @35 I agree it was a shame they didn’t Chevvify the Sky. The styling (by a Brit, originally for the Vauxhall Lightning concept) was in some ways redolent of the Corvette, so there could have been a sports car to have sat below the Corvette. I still reckon (in my what if? flight of fancy moments) that they could do worse than resuscitate the platform if they still own the IPR. In terms of old GM closing it down, I think you are probably right. The factory was deep-sixed and the leftover bits sold off to a third party. Of course ‘Pontiac’ and ‘Sky’ were both buried as part of the Chapter 11 and so it is easier in corporate restructuring terms to throw more thrashing bodies on the funeral pyre to make the change of dynasty seem even more real.

  31. Some of you who still read paper magazines (!) might see an edited-down version of my letter to ‘Autocar’ about the need for a new MG sports car in this week’s issue.

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