News : 9 November 2008

News digest

Compiled by Clive Goldthorp

1) Jaguar and Land Rover

Jaguar Land Rover seeking voluntary redundancies as it axes up to 400 jobs
John Cranage, Industrial Editor, Birmingham Post, 4th November, 2008

Jaguar production lineJaguar Land Rover is to axe up to a further 400 jobs as the global economic downturn takes its toll on the luxury carmaker’s sales. The news was broken on Monday to a 16,000-strong workforce already facing short-time working and prolonged plant shutdowns. The Indian-owned company said it is asking for volunteers for redundancy predominantly among manufacturing workers at its three vehicle assembly sites, Castle Bromwich in Birmingham, Lode Lane in Solihull and Halewood on Merseyside.

Some jobs may also go at the company’s two engineering centres at Whitley in Coventry and Gaydon in Warwickshire and salaried staff within the manufacturing divisions are also being invited to apply for pay-offs. The redundancies are on top of the 198 job losses that JLR announced recently as part of its ‘annual efficiency drive”.

Some shifts have been scrapped at the three plants and shutdowns have been extended as the company cuts output of vehicles in the teeth of a sales slump that has hit virtually every carmaker in Europe and the US. JLR spokesman Mark Foster said the company was looking to lose between 300 and 400 manufacturing jobs by the end of January.

‘We are looking for volunteers. Applications for the 198 redundancies we announced earlier were heavily over-subscribed. We don’t see any significant change in trading conditions in the near future. The environment remains volatile but it is encouraging that the cost of raw materials is coming down from its peak and the move in the value of the pound has been favourable to Jaguar Land Rover and will benefit our ongoing profitability. We will continue to monitor the situation,” Mr Foster added.

A further non-production week will be implemented at Halewood, which makes the Jaguar X Type and the Land Rover Freelander, in December. JLR chief executive David Smith said: ‘While regrettable, this is a necessary action to manage our business through a very challenging period.” As well as seeing night shift working on some model lines suspended as part of JLR’s drive to match output with demand, production workers have also recently been offered three months’ leave at 80 per cent of their normal pay.

JLR owner Tata Motors of India said last week that combined sales of the two famous British brands fell by 4.7 per cent to 214,480 vehicles in the first nine months of the year. Within that total, however, Jaguar sales grew by 12.9 per cent thanks to the popularity of its new XF saloon car built at Castle Bromwich, while Land Rover, hard hit by the slump in sales in big 4x4s such as the Range Rover, lost 9.7 per cent.

Among other carmakers in the luxury sector, Bentley, part of the Volkswagen group, is cutting up to 300 jobs at its factory at Crewe in Cheshire. Signs that the near-global downturn in car sales is hitting companies lower down the automotive production chain came last week when Redditch-based components group GKN said it was cutting at least 1400 jobs – predominantly in its automotive division – worldwide.

GKN chief executive Kevin Smith said of the downturn: ‘I cannot remember it ever having been as bad before.”

Land Rover sales plummet, but Jaguar sees slight rise
Jon Griffin, Birmingham Post, 6th November, 2008

Land Rover has revealed that UK sales for October plunged by more than half, just days after a major round of redundancies was announced. Figures issued by the Society of Motor Manufacturers and Traders show that the Solihull 4×4 maker sold just 1283 vehicles last month, compared to 3049 in October 2007.

But there was better news for Jaguar, where sales, buoyed by the new XF model, rose from 1147 in October 2007 to 1404 last month. Land Rover enjoyed the best performance in its 60-year history in 2007, clocking up around 226,000 sales worldwide. But the Lode Lane firm has been badly hit by the 2008 credit squeeze.

Land Rover spokesman Mark Foster said: ‘Clearly, this is a decline that mirrors the one we saw in September and indicates why our Chief Executive David Smith is calling for a one per cent cut in interest rates. We know we have got customers who want vehicles but the availability of credit is sometimes making it very difficult for them to go through with the purchase. There is a continuing uncertainty and volatility in the market which is making people hold off from committing themselves to what is a significant purchase. There is no doubt that the next 18 months are going to be extremely difficult – this is a global economic downturn.”

But Mr Foster said Land Rover was well placed to prosper in overseas markets. ‘We export to over 160 countries and we are still seeing growth in markets like China, Brazil, Russia, the Middle East and North Africa,” he said.

‘Although the UK is our biggest market, you cannot get too obsessed by one month, one market. Around four out of every five Land Rovers built go overseas. We want to see a more stable economy and take advantage of the progress we are seeing in overseas markets, where there is opportunity for growth.”

The SMMT figures show that SAIC/Nanjing sold 27 Longbridge-built MGs in the UK last month.

India’s other big ferocious cat
The Sun, 31st October, 2008

IT’S a situation that most people still find hard to believe – Jaguar and Land Rover in the ownership of an Indian company. Tata Motors didn’t even start making cars until 1998, but the Tata Corporation is a huge and successful international business made up of 98 different firms employing nearly 290,000 people.

When Tata bought Jaguar and Land Rover for £1.2billion earlier this year, most people thought they’d got a bargain, but no one predicted the economic slump that everyone is now in. The British manufacturers are both being hit and have made 200 voluntary redundancies and slashed production. So what does the future hold? Sun Motors travelled to India to talk to Tata’s Ravi Kant, a key member of the Jaguar/Land Rover board.

THE future is bright for Jaguar and Land Rover, despite the credit crunch, according to Ravi Kant.

He said: ‘We do believe that one thing that should not be sacrificed is their ability to come out with new products. That is what will bring customers into dealerships. We understand our responsibilities.” But Mr Kant admitted that Tata, like everyone else, had been surprised by the speed of the slump. He added: ‘Jaguar and Land Rover are going through fire.

‘Unfortunately, they are caught in this difficult situation but we are positive they will come out of this. They have an outstanding group of managers.” He clearly believes that new models are vital to future success, although he would not comment on a new sports car being one. But he did say: ‘Jaguar stands for high-performance, beautiful cars. That is something everyone buys into. Jaguar should move towards that heritage of fast, beautiful cars.”

However, he said the new management would be getting involved in the business. He said: ‘We will definitely ask questions and see that the money is spent wisely.” He revealed that a high-level team from Jaguar/Land Rover were in India holding extensive discussions to set up a strategy to sell vehicles there. A team from Tata would also visit the UK. Mr Kant reassured Jaguar and Land Rover workers about Tata owner, Ratan Tata. He said: ‘He is a person who will look after you. You can trust him.”

And he said that he and Mr Tata, who is now visiting his UK operations once a month, had been ‘hugely impressed” with the British workforce after visits to Jaguar and Land Rover plants across the UK. He added: ‘We were hugely impressed with the transformation at Halewood, which has gone from Ford’s worst plant to its best.”

He said any decisions on further redundancies would be taken by the British management, depending on the economic conditions. But I expect more redundancies will be called for in November. However, Mr Kant said that Tata had ‘no regrets” about buying the British companies. He said: ‘We believe very strongly in the companies. The down-cycle is unfortunate but it will give way to an up-cycle, there is no doubt in our minds. But there is still a lot of work to be done.”

Tata Motors have problems of their own. The much talked about Nano model, targeted as being the cheapest new car in the world at around £1200, has been bogged down by problems. The biggest was over a new factory in Western Bengal where the car was to be built being the subject of a major political row, which ended with Tata pulling out.

Now the car will be built at another factory but that will mean a delay. In the meantime Tata will build the Nano at either of its two other Indian factories so that they can get the car on sale by next March. Mr Kant said: ‘The customers don’t want to know about our problems, they just want the car.”

But he was unwilling to confirm whether Tata would be able to offer the Nano for sale at just £1,200, a price industry experts say will be impossible because of recent increases in the price of raw materials such as steel. He said: ‘You will have to wait until the launch of the Nano for the price.” One car that will be on sale — and in Europe late next year — will be an electric version of Tata’s Indica supermini.

The move into electric vehicles is just another example of Tata’s determination to be at the forefront of motoring technology. They are also investing heavily in Jaguar and Land Rover developing a range of diesel/hybrid vehicles. But Mr Kant revealed that there were no plans for Tata to expand in Europe or start selling cars in the UK in the near future.

Tata clearly see developing the Jaguar and Land Rover models, as well as their own Nano model back in India, as the key areas to focus on in the immediate future.

2) SAIC Motor/MG and Roewe

Despite slow market, SAIC expands capacity
Yang Jian, Automotive News China, 4th November, 2008

Roewe 550
Roewe 550 sales are picking up

SHANGHAI — Shanghai Automotive Industry Corp continues to build new production capacity, despite a slowing market and modest demand for its own brands, MG and Roewe. On October 27, it started building production lines for a compact car platform and a small displacement engine in the Pukou district of Nanjing, according to information released by Nanjing Automobile Corp., now a SAIC subsidiary.

With a total investment of 2.6 billion yuan ($380.1 million), both projects are due to start operation before the end of 2009. The Pukou plant will then have an annual capacity of 200,000 cars and 250,000 engines. The plant will mainly produce MG brand cars, says a spokesperson for SAIC. But the spokesperson says some compact Roewe brand models may shift to the plant in the long term.

In the first nine months of this year, SAIC only sold 5863 MG cars and 16,947 Roewe models, according to Automotive Resources Asia, a unit of JD Power and Associates. The Pukou engine line will produce engines with a displacement range of 1.3-1.6 litres, according Nanjing Auto. Developed by SAIC’s technology center in Shanghai, the engines will be first mounted on four MG models to be built on the compact platform in Pukou. Further details on these models are not available.

SAIC obtained the Pukou plant and the MG brand when it acquired Nanjing Automobile Corp. in December 2007. The plant makes three MG models: the MG7 four-door sedan, the MGTF roadster and the MG3SW hatchback. The Pukou expansion is the latest move SAIC has taken to expand capacity for MG and Roewe.

On Sept. 19, it launched the Lingang plant in a suburb of Shanghai. The plant, with an annual capacity of 150,000 cars, is SAIC’s third passenger vehicle plant in China. Before acquiring the Pukou plant from Nanjing Auto, SAIC had started making Roewe cars in its Yizheng plant in east China’s Jiangsu province. The Yizheng plant has a production capacity of 50,000 cars a year.

The Lingang and Yizheng plants mainly make Roewe brand cars. However, both MG and Roewe models will share platforms and be built in all the three plants, according to the spokesperson for SAIC. The spokesperson says, “We’ll use the same platforms to develop both MG and Roewe brand cars.”

GM should sell Buick to SAIC
Charles Child, Editor, Automotive News China, 4th November, 2008

So General Motors is lobbying Washington for money to buy Chrysler. But before tax money is approved for the deal, I’d like GM to try harder to sell assets and raise private capital. Here’s an idea: Sell Buick to its partner in China, Shanghai Automotive Industry Corp. I claim no special insight from decision-makers at GM or SAIC, but the deal makes sense for various reasons.

First, the obvious: GM is burning through an estimated $1 billion (6.85 billion yuan) of cash a month. Moreover, its lending arm, GMAC Financial Services, is so short of capital that it can’t adequately provide auto loans to consumers. So it’s time for difficult decisions. Buick has long been a core brand for GM. But in today’s crisis, it’s expendable. GM does not have the money to reinvigorate Buick’s product lineup, now down to just two sedans and a crossover in the United States.

GM already has too many brands, which it has recognized by putting Hummer up for sale. The problem will only worsen if it acquires the Jeep, Dodge and Chrysler brands. It’s best for GM to sell Buick while the brand still has value. It’s hard to say how much Buick is worth, but India’s Tata Motors paid $2.3 billion (15.75 billion yuan) for Jaguar and Land Rover. So I’m guessing Buick might fetch $1 billion (6.85 billion yuan). While Buick is drifting down in America, it’s sound in China. Chinese consumers’ regard for the brand predates the Communist revolution.

Buick sales are higher in China than in the United States. Last year, GM sold 185,791 Buicks in the United States and 331,780 in China. GM and SAIC jointly operate an important product development engineering center in China. In North America and Asia, Buick’s manufacturing, product development and dealers are embedded in GM’s organization. SAIC could start with a modest role as Buick’s new owner but gradually assume more operational responsibility.

In today’s crisis, creative solutions are imperative. Nowadays, nothing is sacred in Detroit.

MG will get an A-Class car in ‘09
China Car Times 4th November, 2008

MG’s latest Pukou manufacturing centre is set to produce 4 new cars in 2009, all of which will be A-class motors according to Chinese language auto reports. The models will be a mixture of hatchbacks and sedans which will bare the MG5 and MG6 monikers. The MG6 is said to be the next model to be launched after the recently launched MG7 Auto gearbox model. The MG6 is set to go on the market next year, although no specific time frame has been specified yet.

The price of the MG6 is estimated to between 120,000rmb and 160,000rmb although we’re not entirely sure whether the new model will be a competitor for the Ford Focus or larger models such as the Ford Mondeo. The MG5 is also set to be launched later in the year – set between the MG3 and MG6, the MG5 is not going to be the rebranded MGZS from the MG-Rover days, but rather an entirely new model with, from what we hear, 1.5- and 1.6-litre engines.

We had previously also heard that MG were working on turbo assisted engines as well. The MG5 is expected to be around 100,000rmb. An MG or Roewe MPV is also rumoured to be in the works and we understand that will be a joint project between MG-Roewe and SsangYong – we pray that isn’t a rebranded Rodius.

Roewe 550s were also spotted out road-testing in Preston, UK recently, which could mean that 550 is closer to seeing UK and European sales or even production than we had previously believed.

MG TF Production at Longbridge

Chinese car makers SAIC urged to keep on producing at Longbridge
Birmingham Post 6th November, 2008

The leader of Birmingham City Council is to make a personal plea to the board of SAIC, urging the Chinese automotive giants to keep faith with car production at Longbridge despite economic gloom gripping Britain and much of Europe. Mike Whitby flies to Shanghai at the weekend for a five-day trip and will hold talks with members of the regional government and leading business figures.

At the top of his agenda is an opportunity to address SAIC directors and urge the firm to stick by promises to bring more jobs and investment to Longbridge, where production of a limited edition of MG sports cars began in August and sold out within weeks. Earlier this year, SAIC held out the possibility of more than doubling the workforce and building 50,000 vehicles a year in Birmingham. Fewer than 200 people are believed to be employed at the plant at the moment, although there are plans to produce 3700 cars a year.

Coun Whitby (Con Harborne) emphasised the important nature of his trip at a time of ‘financial uncertainty”. He will urge the SAIC board to speed up plans to transfer 250 designers and engineers, currently based at a research and development centre in Leamington, Warwickshire, to Longbridge. Coun Whitby said: ‘A downturn is no time for complacency. It is no secret that the global economy is struggling. Our cities, which have always been the engine of the UK’s economy, must take proactive steps to ensure that they secure long-term economic investment.

‘I will be meeting the Chinese Minister of Commerce to discuss mid and long-term business opportunities for the benefit of Birmingham and the city region to see how we can work together for the mutual benefit of both parties. Though Birmingham is now known for a variety of industries and commercial sectors, the city’s history is inherently linked to the automotive and manufacturing industries and SAIC recognises the pedigree and potential of a city with the skill set to back up its ambitions.”

He added: ‘The fact that so many leading figures in Chinese Government and business now directly speak to Birmingham and are so eager to work with us first and foremost among UK partners provides real evidence of our growing status on the global stage.”

Coun Whitby will meet the Chinese Minster of Commerce, the President of Shanghai and leading businessmen. SAIC is the largest automotive company in China and the fourth biggest in the world following its takeover of Nanjing Automotive Company. Coun Whitby will launch Birmingham’s Big City Plan, outlining development opportunities over the next 20 years, to an international audience of property developers and financiers. He said: ‘The launch of the Big City Plan will help raise Birmingham’s profile in a country of massive potential. In a time of economic uncertainty we must capitalise on our global trade links.”


It doesn't seem long ago since MINI production was booming at Cowley...
It doesn’t seem long ago since MINI production was booming at Cowley…

Mini production stops for a month 6th November, 2008

Mini production is to be cut back and the factory closed for a month over Christmas. Workers at the BMW-owned factories in Oxford and Swindon have been told the two-week Christmas shutdown is to be extended to four weeks this year. It is thought that key workers such as maintenance and engineering staff will remain on site during the closure. Union Unite said the extended shutdown would not affect workers’ pay.

The holiday was going to be from December 18 to January 5, 2009, but will now start on December 7. It will affect about 4700 workers across three shifts on the Oxford site. Mini becomes the latest UK vehicle manufacturer to announce either a longer Christmas and New Year break or an immediate production cutback. Roger Maddison, national officer at Unite, said: ‘We understand the very difficult economic conditions car manufacturers are facing. We have robust agreements in place to protect our members as much as possible during these difficult times. However, we remain vigilant and we are keeping a close eye on developments in the car industry.”

A spokesperson for Mini said: ‘Despite challenging economic conditions, Mini’s worldwide sales remain 12.1% up on last year and production remains at about the same level as last year. One of our strengths is our flexibility and this means that we are able to deal with fluctuations in the production programme.”

Mini USA prices electric Mini Cooper lease at $850/month
Alex Kaufmann, Motor Authority, 6th November, 2008

Motorists looking to get into the limited lot of 500 Mini E electric vehicles headed for production in California will have to pay a pretty penny for the privilege. Aside from the limited volume production, the technology itself is cutting-edge, and even the $850/month pricing won’t cover the actual costs of the cars’ development and construction.

While raw value may not be a feature of the Mini E, at least at this early stage in its lifecycle, the car does offer a strong performance package for a multi-purpose EV. With an expected range of 150mi (240km) on a 2.5-hour charge, plus peppy acceleration and highway-speed capability, the Mini E should prove a satisfactory companion.

The savings in fuel costs will offset the lease price somewhat, though the recent return to sane gasoline prices in the U.S. has lessened that advantage to a degree. A standard Mini Cooper would cost about $350 for a 24-month lease, or nearly $800 for a hypothetical 12-month lease, though Mini’s shortest offered term for its standard vehicles is currently 24 months. And in California, where image counts for everything, the value of an electric Mini Cooper can hardly be measured.

Restrictions on the locations where the Mini E can be kept and charged will also be included in the leases, reports Luxevelocity. Mini policy will allow “only lockable garages or similar buildings” to serve as home bases or power stations for the car. Special maintenance requirements and fees will also apply, but are only revealed upon agreement to the lease terms.

The Mini E is due to make its public debut at the Los Angeles Auto Show in about two weeks’ time.

4) MG

MG museum is up and running
Oxford Mail, 30th October, 2008

A museum dedicated to the MG car has reopened in Abingdon. The MG Museum opened on October 25 on the second floor of the County Hall Museum, in Market Place. The small museum, organised by former MG employee Brian Moylan, ran for a trial each weekend throughout last winter.

However, it has now been given a permanent home – with the promise of more space to follow when the museum is revamped. Abingdon Works Centre, the local branch of the MG Car Club, donated £500 towards expanding the exhibition.

5) MG Sports and Racing Europe

300 jobs to be created on estate as MG moves in
Wolverhampton Express and Star, 30th October, 2008

Up to 300 jobs are to be created in the Black Country when production of a sports car moves to the region next year, it has emerged today. MG Sports and Racing Ltd, which is based in Worcestershire, is due to move into premises in Neachells Lane, on the Wolverhampton and Willenhall border.

The company will produce around 1800 models of the MG XPower each year which will cost in the region of £34,000. The expansion into the area will create up to 300 jobs on the site which is owned by Caparo and see a production plant created. The positions are to be created over a two-year period and the first cars could come off the production line at the end of next year.

It was originally hoped MG Sports and Racing Ltd would start manufacturing cars from early 2009 but the move has been delayed by the credit crunch. Managing director William Riley said: ‘We are planning to start building cars from next year and it is definitely now just a question of time.”

Willenhall councillor Carl Creaney said it was ‘great news” for the area. ‘It will be good to see automotive moving into here and I am sure everyone will be happy,” he added

6) Caterham

Caterham creates next car online
Ben Whitworth, CAR Online 5th November, 2008

Caterham has turned to cyberspace to design its next model – the low-volume carmaker is calling on fans around the world to log onto a bespoke website to submit their ideas and designs for every aspect of the new Caterham, before ultimately voting on what makes it to the final vehicle. Sounds like a potential recipe for creating something superb – or an outright disaster.

How will Caterham make it work?

The website – – will act as a forum, hosting blogs, articles and what Caterham calls ‘a Wikipedia-style user-edited knowledge base’ to turn user input into a workable vehicle design. A comprehensive voting system that covers all aspects of the car will then be initiated, and once the final specification is agreed a prototype will be produced with initial production slated for 2011.

Caterham is hoping the forum will explore how the company should proceed and take into account environmental pressures by exploring alternative methods of propulsion, such as electric and hybrid drivetrains, while still maintaining the Caterham’s white-knuckle driving dynamics.

And the bloggers will be able to dictate everything from bumper to bumper?

‘Every attribute and detail of the new vehicle will be decided by Project Splitwheel members, from the chassis and powerplant to styling, equipment and even the name,’ says Splitwheel founder and automotive consultant Piers Drake. ‘Importantly, the partnership with Caterham gives the Project access to engineering resources, facilities and expert knowledge to deliver this car from the internet and into the real world.’

Initial registrations for this novel approach by Caterham’s R&D department can be made at

Keith Adams

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