News : First MG6 under the hammer in the UK

Carole Nash Classic Insurance Specialists

Steven Ward

Where Do We See This Then?

The first MG6 to go to auction in the UK didn't set the market alight.
The first MG6 to go to auction in the UK didn't set the market alight.

Thursday 12 January saw what is believed to be the first MG6 to hit the harsh world of the automotive auction hall. Manheim Remarketing was the auction group and the venue was its huge Colchester site. Auctioneers Nick Key and Dean Jones were the boys on the rostrum charged with finding the car a new home and more significantly, a residual base for the model range.

Entered by a Main Dealer Group, believed to be Roy HG Tolley of Colechester, which is an authorised MG dealer. The MG6 had previously been advertised for £13,495 on AutoTrader. This adds a new dimension to seeing the MG hatch at auction; MG Motor UK vowed upon the car’s launch that no ‘6 would be found for sale outside of the dealer network for the first two years of the vehicle’s life. Primarily, this was to protect the residual value of the cars and maintain an air of desirability for the range.

The car itself was a 2011/11-plate Granite Grey MG6 1.8T GT (although nobody but nobody referred it as a GT) finished in mid-range SE spec. The car had covered a not-yet-run-in 3000 miles. Given the age/mileage/spec this was pretty much the pick of the range, so a sale should have been easy enough. Especially when the sale that day was going great guns, the motor trade it seems is determined to fill its boots out of recession with regard to stocking levels.

Unfortunately, the MG6 entered the hall at the end of a long and frantic sale where a Bentley GT had just wowed the crowds with a low starting price and resultant strong bidding. As the MG6 drove in, my heart sank and the traders dispersed, they’d just had their high and it was lunch time. I had the CAP residual figures in my hand. It was booked at just £11,800 a bargain by anyone’s measure. The auctioneers gamely threw the initiative at the remaining Traders, “You tell me then, where do you see this?”.

Talk like this is an open invitation to insult the auctioneer with a derisory starting price. The idea being that such a low opening bid from the floor will spark interest and get bidding underway.

No bid was forthcoming, despite repeated requests. Eventually, it seemed the fire extinguisher bid £10,500. A pot plant then bid to £10,600, a poster advertising a Fried Breakfast threw in a bid of £10,700 and so forth until the No Smoking sign closed the sale with a provisional bid of £11,000. The car remains for sale and will make another celebrity appearance on Tuesday 17 January. According to our sources, £12,000 is needed to secure the vehicle. That’s a drop of around £5390 against new, retail.

Questions must therefore be asked of MG Motor UK and its commitments to the dealers, the cars and the owners. Why, despite their robust pledge to protect MG6 residuals has a franchised dealer sent a prime example of the model to action? From what’s understood, this was strictly not to be tolerated. I can understand a desperate dealer doing so, for the banks are tough with regard to stocking loans – meaning cars and cash must be turned for a business to be viable.

Why then, has MG Motor UK not stepped in and taken the car back in-house to sell through its Gate-Q operation? This would protect the dealer and the residuals.

Keith Adams

Keith Adams

Editor and creator AROnline at AROnline
Created www.austin-rover.co.uk in 2001 and built it up to become the world's foremost reference source for all things BMC, Leyland and Rover Group, before renaming it AROnline in 2007.

Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Classics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...

Likes 'conditionally challenged' motors and taking them on unfeasible adventures all across Europe.
Keith Adams

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89 Comments

  1. The no smoking sign got a good deal. I bet the potted plant and the fire extinguisher were hopping mad though, missing out on a deal like that.

  2. I’ll tell you over a more secure Chanel Steve. But a contact of mine big into Honda in the East Midlands was offered a 6 as a chopper against a new shape Civic iCDTi yesterday….. they wouldn’t take it!

    I kid you not

  3. Not surprising though, Mike. If the manufacturer can’t sell them, why would another brand’s dealers lumber themselves with one into stock? Suppose they could always auction it. No, hang on…

    Have Marshalls Vauxhall of Cambridge still got that low mileage swapper on their books?

  4. Pretty unusual for a dealer to sell cars like this I would have thought. It will make a true bargain car but will set prescident and thus destroy any chance MG Motor have of strong residual values.

  5. Here we go. Same car as the one Tolleys are auctioning, just with 10k miles. £11995 screen price. Can’t see Tolleys getting £12k at auction for their one somehow…

    Marshallweb

  6. Hardly an encouraging piece of news. However, you can understand a dealer not wishing to tie up funds in a car which will sit on their forecourt for months.

    How many private individuals were present? You’d think a private buyer may have seen the opportunity to acquire a bargain, virtually new car. One with novelty value too!

    The MG6 is still a very unknown quantity with virtually zero demand. You can understand the reluctance to invest. So, it’s over to the management again – Promote the car!! Create some interest, some demand!!

  7. Perkins will sell you a pre-registration zero miler for £12500 gents.

    It does pose the question does MG marque have a person to monitor the “second user” market? If so they need to send him down to Colchester tuesday to bump the hammer price of this through the roof, before the run home to Q gate.

  8. At auction, it is worth about £8,500 tops to a trader, proving residuals are already on the floor. I’m expectiong to see more & more dumped on the auctions as unsold stock, simply because the dealers have bills to pay. It does prove my theory that the cars are about 30% too expensive new.

  9. No dealer at this time of year wants to tie up cash in unsaleable cars, and the MG6 is a definite landmark for any dealer. He’d much rather have two low mileage Fiesta’s for that money.

    Fact is, nobody wants them and no amount of trying to ‘control the market’ will change that.

  10. “Fact is, nobody wants them and no amount of trying to ‘control the market’ will change that.”

    I don’t think that’s accurate, it’s just no body knows about them!

  11. It’s a damn shame because there is nothing fundamentally wrong with it. In that colour it looks pretty damn good too!

  12. If you buy one on finance you will definitely be stuck with negative equity for the duration of the term. So owning one will be a long term commitment. And none of them offer a buy-back during the term. I reckon at the end of five years you will be lucky to get £1500 for it as a p/ex.

    It ain’t even worth the absurd £150 documentation fee. Who are they kidding?

  13. Dennis, nobody actually does want the cars, and that IS a fact. For the money, you can buy a decent diesel, with better residuals, low tax, and far superior economy, plus a 7 rear warranty in the Kia C’eeds case. No matter what the management do, MG is now doomed here in the UK. This case simply proves it. Just think what the residuals will be like when Avis dump theirs in huge batches. The cars are already proving to be worthless, and the used trade already don’t want them. I’m expecting Tolleys to dump the franchise soon too, due to lack of sales, and Kerridges surely wont be far behind.

  14. And this one isn’t the first to go ‘under the hammer’, as at least 2 have gone through salvage auctions as total loss write offs. Also one dealer in the north east was using e-bay to try and shift unreg’d stock at several grand off list a few months ago. Dealer confidence is now at zero with the brand it seems.

  15. why the big hoo har?has no one ever seen a 30k ex enterprise year old insignia go through the block at less than half price?

  16. Difference is, GM will always have Enterprise to buy thousands of Insignias from them every year, at a price a private buyer will never achieve new. For MG they need to rely on private buyers, who buy cars at a lot closer to list and are a lot more sensitive to residuals.

  17. That car actually looks quite smart… shame they don’t advertise them and the dealers have to resort to selling them off like this. I’d buy it for £8k

  18. I guess this says a lot about the relationship between Longbridge and the dealers. If the dealers are no longer on board and are resorting to fire sales, how does MGUK expect that they can develop a relationship with potential customers?

    Shame that Sir John Harvey Jones isn’t around to give them some much needed guidance. I know that it is frequently echoed that MG are playing a long game, but their activity to date only serves to damage future brand credibility. It would not better to stage a tactical retreat at this point, an relaunch once they have a full range of cars, with appropriate engines, and a clear strategy for success. Alternatively, they could start advertising in the accepted media, engage in product placement, and push the metal like their livelihoods depended on it.

  19. Name one company, other than Daewoo, that has successfully protected residuals in the British car market. Citroën made exactly the same claims for the C6 – that no cars would be discounted, that they’d be kept in the dealer network, that they would be bought back under protected residuals. It is nothing but PR guff, because they cannot control what people do with their property.

  20. It’s not as if SAIC are a poor company by any means. Just throw a great wad of cash at advertising and get the cars selling! And hurry up with the diesel.

  21. Who was genuinely surprised by the outcome? We’ve given MG Motor chance after chance to make an impact here in the UK and they’ve wasted every single one of them. Recently they teamed up with Birmingham Airport (God knows why) but the video on Youtube is advertising GOLD. Edit it down to 45 seconds or so and you have a brilliant advert. Same with the ‘Brand’ film on the website, that’ll never see the light of day on TV, even though its wonderful. I still speak to people now who are not aware that Longbridge is open again (I wont use the phrase ‘making cars’ as it will only lead to arguments) and this is because MG pulled the ad after about 10 days on air. There has been no press adverts and none on the radio. I find it very hard to believe MG did not know this car was going to auction and yes they should have sent people to watch it. They were only in London so hardly a major commute!

  22. I can back ’26’ up because I a buyer who couldn’t cheaply buy a Kia, despite the lengths my man went to…. Kia’s angle is to lock buyers into 7 years of franchise custom at the service desk, not profit on car sales…

  23. @Keith yes thats it. Fab Video. I assume the word viral gets lost in translation and the Chinese think its a bad thing (asian flu joke in there somewhere)

  24. I mentioned some time back on earlier MG6 features that there is quite a few cars on Autotrader, startling at about £12000 upwards. Regards Mark

  25. I think the dealer are going to have to accept a thumping loss on this one. It will be lucky to sell for £8k to the trade, because they have to make a profit on it, which will then prove the residual value of the car. I bet Keith is now regretting buying the Bini now that this 6 is up at auction…

  26. Absolutely no comment needed, other than it seems to prove that no one (who actually buys new cars) seems to have been fooled by the badge.

    No amount of advertising is going to change this, unless they go down the well trodden, price driven, route of saying that “this is a new car for the price of a 3 or 4 year old one”.

  27. When the ex Avis Hire cars start to hit the auctions in 3 to 6 months it looks like we’ll have a residuals blood bath!

  28. The poor residuals are to be expected with a Chinese car following on the heels of a dead British brand that itself also had poor residuals. But that’s not the issue that really jars with me.

    The real issue is that here we are on a site that is pro-MG and wanting them to do well. But not ONE of us has said we’d like to start the pioneer trail & buy one ourselves. Okay, I’m in Aus, but like you, I wouldn’t buy one. Sure, I’d love others to buy one & then I’d look at doing the same in the future. But even the lure of them expanding operations in Blighty isn’t a compelling reason if the car isn’t a ‘need to have it’ item.

    I guess if we were all so concerned about MG, more would have been done to save MGR, but we all just watched. The new MG is feint hope of a revival. But at this rate, Longbridge has a poor fate (yes, I know the last line is cheesey).

    I would LOVE to be proved wrong though.
    SR

  29. I don’t think that being pro-MG is akin to blindly wanting to buy any product, at any price.

    The current MG6 is a niche car, in that it’s got a powerplant suited to a small, enthusiast-lead demographic, and a body style that competes in one of the most hotly contested areas. That’s good for China – they’ve got a competitive product in a fragmented marketplace – but bad here, where there’s a lot of existing competition.

    That’s not to say that it’s a bad car, but it’s not an enthusiasts’ car because IME, enthusiasts either buy old cars, or unusual cars.

    The diesel will help a lot, and is really the proper test of China’s potential in Western Europe as a car manufacturer (and even then it’s not if, it’s when). Not using the G-series seems odd, but the Yunnei 1.9 looks to be a very up-to-date powerplant. We may yet be impressed.

    The 6’s appeal is limited. Plenty of AROnline readers bought or have owned TFs.

  30. Thos residuals are no worse than any other car of that age going to auction. As someone else said, how many Insignia’s can you find online at half their value at only 6 months old?

  31. Googling suggests that it is indeed Euro 6, or reaching it, as GM have been pushing the development too (Indian emissions standards as well). 16v, DOHC, 100KW, CRDi, decent torque etc. – where we can’t tell, yet, how it’s sitting in terms of refinement; isn’t that why the G-series stalled, getting it to an acceptable level of NVH in time?

    Mind, the Yunnei news is about 2 years old, the stuff that’s readily available. SAIC have had two years to get it to the right levels. Maybe the oil-burning 6 will surprise us all.

    I am surprised there haven’t been leaks about the progress (other than the Royal spotting, of course) with any of the UK consultancy.

  32. I dont think this is worrying, the new MGS are still young on the market, and it will take a while for buy confidence to increase especially on the used car market, I think MG know this. and I certainly think that anyone spending say 80 % of a new car price is probably more likely to spring for the remaining 20% and get the new car….after all why is the above car on the market? alex

  33. James @ 40

    You are right; when a used Insignia or Mondeo (for example) reaches auction, they will find buyers for substantial loses over their new price.

    However:

    1. When the very first examples of a new generation of either of these models reach auction, they always attract a lot of interest and lively bidding. The MG6 attracted no interest and not one single bids off any value. I’m not certain how no bidding of any kind (not even £100) can be an indication of residuals being “no worse than any other car of that age going to auction”.

    2. We Buy Any Car will now buy MG’s and they have just valued this car at £8,840.01

    3. I have yet to made aware of a single dealer that will accept one in part exchange.

  34. why dont we just get real no one wants the mg6 .and buy the time the other models are launched theyll be out of date, mg just dont get IT, the next headline will be [ ALVIS HAS LEFT THE BUILDING ].built in china nil point built in longbridge ?.get rid of the current manufacturing and sales experts and lets put people in with skills and not the comics who run it now .

  35. No surprise here. The combination of a history of rock bottom residuals (remember what happened to used 800 prices once the 75 was launched) & the fact that nobody wants to part with anything other than tap washers unless the lots is an ex-celeb car at auction is a deadly one.

  36. Right let’s get some severe perspective here. This was an £18k car, less than 1 year old, not getting any bids, and is worth at auction about £8k max. That is roughly a 60% drop in the first year, which really does bode very badly for the brand, and I notice someone else agrees with me that when Avis dump their lot, it will completely destroy second hand values, simply because supply will massively outweigh demand. And this car will not be the first one dumped in auction, as main dealers have overheads to pay. This is the tip of the iceberg. And if it had been an 8 month old Mondeo, it would have flown out of the auction for about £11-£12k

  37. Reference comments about the lack of contibutors to this site actually buying an MG6 themselves –

    I suspect the simple reason is that many avid followers of AROnline just ain’t got the money to spend circa £15k on a car. We’re a bunch of enthusiasts spending around £2k or £3k on an old MGR product and cherishing it. Our words of support for MG and the 6 are not diminished by the fact we ain’t bought one ourselves. The simple reason for us not buying a 6 is that we can’t afford one – we ain’t in the new car market.

    This argument certainly applies to myself!

  38. Tragic! The failure of MG UK and it’s Chinese owners SAIC to defend dealers and residuals indicates the true nature of their British operations – a facade for Chinese marketing purposes.

    Sadly, the slow release of engine options and a wider car range seems likely to combine with rock-bottom residuals to kill any prospect of a long-term buildup of MG. But then, we’ve seen that kind of stiff-necked management attitude before, right? BL’s finest ;(

    Tragedy is, what about the skilled design teams who are contracting to produce these MGs? Their jobs will go too after SAIC have incinerated MG’s brand…

    Build quality perceptions (HGF and Chinese made worries), and consequently residuals, seem the main issues MG need to tackle. Their failure to do so indicates incompetence or that they have just cherry picked the IP of MG for the Chinese market.

  39. I can be as cynical as the next man, but everyone seems to have forgotten the positive noises they made when the Avis deal was announced. Ok, hey’re not private sales but at least there will be 500 cars out there (eventually) that Joe Public will get the chance to drive and may actually like them. Consequently these could generate sales of new cars and create an improved perception of the car.

    I am sure if we picked around all the auctions in the UK we could find other examples of well-know makes being ‘given away’ well below new/dealership values.

    Every thread about the MG6 on this site, positive or negative, descends into a tirade of MG UK/SAIC bashing by the Usual Suspects, and it is getting very tiresome now. Same old comments regurgiated over and over and over and over…….

    And over

  40. MG Motor (why the name change on all the sites?) have only themselves to blame for the poor residuals. No one knows about it. The likes of Paul T who I think owns one is a brave man

  41. Even AVIS have made no mention of it though Paul. I don’t believe quality, or HGF are fears for the MG6, just manufacturer/dealer back up and residuals. I class myself as the new purchaser end of the wedge not the enthusiast end.

    Effectively the last time this happened was 1992 when the Yugo Sana got pulled from the U.K. marque wise (though back up is spot on) would be the Dodge exodus a few years back.

  42. Totally agree with all Marty B’s points,Buy a Mondeo and you will have some value left in the car when you do trade it in,and the parts are easy to get..Buy the MG6 and it’s money down the drain

  43. I suppose it’s difficult because we could be viewing everything wrong here.

    MG UK isn’t a continuation of MGR despite how we want to feel about it.

    It’s a NEW venture. Yes, they have made enormous erors with the marketing, yes the product ‘range’ is too small with limited choice, BUT… SAIC in Europe are dipping their toe in the water with MG UK; that’s all at this stage, they’re far from a naive company I’m sure, and you never know; they may actually be ‘trying’ to cast off some of the old ‘enthusiasts’ (many of whom had no respect for any MG product after 1980 anyway) and begin to forge new buyers. I personally think this is their long-term goal.

  44. @ e668ecp

    No, I don’t own one but there are a lot of people who comment extremely negatively on it without the benefit of driving it or owning it.

    I have been one of the harshest critics of SAIC and how they have handled their launch in the UK, but as on another forum I care not to mention (not McDroitwich) there has developed a small group of members who do nothing but fire criticism either at the car or those who try to be positive. I feel their efforts would be better directed at MG Motor/SAIC directly rather than boring us all on here.

    I would imagine that MG would tell them to GTF which is why they won’t do it. They don’t have the balls to face up the target of their citriol and use this platform to ‘have a go’.

  45. @ Marty B (49) Yes and the Mondeo starts at £18k for bargain basement spec. Mondeo’s suffer just as badly with residuals because there are so many of them. The 6 has an excuse to perform poorly at auction (A) because it’s an unknown car and unknown risk to people (B) Seems this is the first one to even get to Austion which kind of supports my point (A)

  46. The company as a whole seems to just lurch from crisis to crisis here, and it is time SAIC took a long hard look at what the hell is going on, and ask themselves why? You have to look at past Chinese business ethics too. They have a nasty habit of getting others to design things for them, then copying the ideas back in China. I sadly have a feeling in my gut that SAIC are getting the staff at Longbridge to design them a range of cars because they haven’t a clue themselves, and once they have the ‘full house’ of models, it will be bye bye Longbridge. I know I am not the only one with this fear. And December’s true sales figures (minus the 100 Avis ‘bought’) is still barely into double figures. That doesn’t pay the bills at the dealerships.

  47. @Paul T / Post 57

    You mean to say there are Forums other than MacDroitwich discussing the MG6? Are these other forums Unmoderated, Uncensored and benefiting from a Supercover reserve forum?

  48. @ Lord Sward

    No, this particular forum is well known, and certainly cannot claim to be uncensored…..

    And yes, it has a dedicated MG6 section whose contributors are polarised between aforementioned Harbingers of Doom and those who worship the god SAIC/MGM with similar utetrances we are seeing just a bit too often now…

  49. @ Marty B

    I agree with most criticisms about SAIC’s marketing, but I cannot understand how some folk feel they are in a position to criticise the car without seeing or driving it. There seem to be some positive comments being made by people like Keith who are not apologists for MG Motor but SAIC are not building on this by marketing the car. Despite this, there are some who constantly snipe at the car without any given authority to do so.

  50. “I sadly have a feeling in my gut that SAIC are getting the staff at Longbridge to design them a range of cars because they haven’t a clue themselves, and once they have the ‘full house’ of models, it will be bye bye Longbridge.”

    If that were the case though they could just move the development and engineering department to a small office block of it’s own anywhere in the UK and sell off the whole of the Longbridge site, they’re not going to be paying the vast insurance, heating and BUSINESS RATES on the site the size of that for the fun of it.

    Of course as Rover discovered having a full range of models is only half the battle, once you’ve got your full range out there you need to already be developing their replacements.

  51. The models are half the problem, marketing and public perception are the other half.
    That is where the Germans go laughing all the way to der bank.

  52. I’ve just phoned the auction house in Colchester:

    The MG6 went back into auction today. There were no bids and it remains unsold.

  53. Dennis:

    “If that were the case though they could just move the development and engineering department to a small office block of it’s own anywhere in the UK and sell off the whole of the Longbridge site, they’re not going to be paying the vast insurance, heating and BUSINESS RATES on the site the size of that for the fun of it.”

    There is no issue of them selling off the Longbridge site, they have committed to only a relatively short term lease; it is not theirs to sell.

  54. I swapped a ZT 260 V8 which I had owned from new for an ex fleet Vectra SRi 150 Diesel. The vectra has been faultless and economical. When the time comes to change the vectra I would consider anything EXCEPT an MG. They look awful, ive seen one on the road and it looked like a prius. PLUS – they dont do a diesel which is what I will be driving from now on.

  55. Dennis is clearly out of touch with things, and the short term lease on Longbridge adds further weight to the doubts of a long term UK strategy. Their current sales will mean Longbridge is losing cash at a rate of tens of thousands a month, and no business can sustain losses that heavy for very long. I would hate to see how far in the red Longbridge actually is, but by now I suspect it is well into the millions. And we all know how quick it is to strip out a car factory, and ship it to China, and Longbridge is just a final assembly plant, so there isn’t really that much to strip out.

  56. Exactly so why would they bother keeping it if they didn’t have a use for it?

    There was nothing stopping them shutting the place down months ago and shifting the R&D to a small site elsewhere.

    Well i’m surprised you decided to make this personal Marty but How am I “clearly out of touch” when i stated above they’re paying a fortune in business rates and running costs? If they move out it saves them a fortune, the same could have been said 5 years ago yet they’re still there. The fact they’re still there suggests they still have plans for it.

    If they just wanted to develop a range of cars and say good bye then they could have just left the staff at Ricardo rather than move them to Longbridge.

  57. David @ 50

    I agree with you. I am an avid MG / Rover man. Both myself and my brother looked into each buying a MG6 last year. While we liked the car itself (in relation to other new cars at least)(I would still prefer the Rover interior anyday!!, we struggled to find the dealer (his ‘main’ MG signage was about a big as newspaper broadsheet advert! and even then this was hidden by a 55plate Discovery awaiting a new buyer!

    Once entering the showroom, the dvd film feature was broken so we couldn’t watch this. We were offered some lukewarm weak as cats p#!s tea and given all the showroom speil and guff about the MG6 and its future. After test driving the cars we were both impressed enough to part with some money (I would have prefferred a diesel, but given I knew that if I didn’t buy it now, by the time a diesel came out, I would have spent the money on house porch rebuild and extension!!). However they offerred us s#!t part ex values for my O2 plate 75 tourer and my brothers 04 plate 45, the finance deals were very limited and all had rubbish residual values (gave the impression that MG weren’t confident of the product) and the only discount we could get out of the dealer was 1/2 price metallic paint option for both cars! We would have thought that MG would have allowed some sort of discount of the cars as a) we were buying 2 at one time, b)knocking some money off would have resulted in two sales for the dealer, c)the company would be wanting to get as many MG6s out there as possible. The dealer even ‘supposedly’ phoned Longbridge to try and get a deal

    It was all dissappointing and we walked away with our little MG plastic carrier bags with a pen, balloon and other cheap advertising gimmicky tat.

    I wish them well and hope they succeed but I for one have been put off buying from MG ever again. I will stick with my tried and tested 75 for as long as I can, and hope she will one day forgive me for even comtemplating trading her in for a MG6!! oh and the work on the house is about to start as well!!

  58. tom-tom:

    Taken from the article that you quoted:

    “But the lease has a six-month get out clause, allowing Nanjing to walk away.”

    So, it’s a maximum 6 month commitment as far as Nanjing / SAIC are concerned; I stick by my original comment that it’s a short term.

  59. I think that was if NAC changed their mind within the first 6 months of the lease. Hopefully someone can confirm for definite.

  60. “The dealer even ‘supposedly’ phoned Longbridge to try and get a deal”

    That’s a common car dealer trick though, it gives the buyer the impression that he wont get it cheaper elsewhere.

    “I think that was if NAC changed their mind within the first 6 months of the lease. Hopefully someone can confirm for definite.”
    I agree, these things usually work buy having a cooling off period after signing the lease, so in this case it would have been 6 months from the date of signing the lease, other wise it would be called a 6 month lease on a rolling basis. They agree to pay X amount per month/year for the lease for 33 years duration, where they have handed back bits like the flightshed, they still pay the same monthly/annual lease fee for the site, but they save money on business rates. Once the initial 6 months are passed then they’re tied into the 33 year lease.

  61. I’d be very surprised if any company would sign a 33 year lease on anything without a break clause being included.

    That or the signatory to the lease is a disposable entity that can be sent bankrupt without a lot of upstream liabilities.

  62. “I’d be very surprised if any company would sign a 33 year lease on anything without a break clause being included.”

    Then there would be little point having a 33 year lease. Generally they have long leases because the longer it is the cheaper it is.
    Of course you can move out, but then you’re usually liable for paying the remaining lease, sometimes at a marginally reduced rate. It’s similar to mobile phone contracts, you can leave the contract say halfway through, but you have to pay the remaining 6 months line rental. If you did this with a property then you save the cost of the business rates on it.
    The company i used to work for had it with a lot of their depots, many were on 40 year leases. If they wanted to close a depot they either had to pay the remaining lease or sell off the remaining lease to someone else. Landlords do this to protect themselves from being suddenly being dumped with large empty properties. It’s similar to buying the leasehold on a flat, if you want your money back you have to sell the remaining lease to someone else.

  63. That’s not strictly true. A 33 year (or any length) commercial lease could have a break clause of (any number) of years as negotiated between tenant and landlord. The break clause means effectively that the tenant can give notice and vacate any time and only be liable for rent up to the date in the break clause. There will be conditions but assuming the tenant meets them they won’t be liable for rent for the full duration of the lease.

  64. So they might agree to say 5 years, so if they walk out they have to pay up to 5 years lease?
    I wouldn’t have thought any landlord would bother accepting a 6 month clause, as anything other than an introductory thing, i mean a lease is there to protect both parties?

  65. I dunno, if I was a property manager being given the option to lease all or part of a car factory that I knew was on designated polluted ground, to continue operations as a car factory, i think i’d take it rather than pay the remediation costs of making it fit to use for something else.

    Keeps those costs off the balance sheet until the lessee pulls out, and provides an income stream from designated ground for as long as it lasts too.

    You never know, one of the break clause conditions might even be that SAIC pays for the remediation if they pull out. I doubt it personally…

  66. Though even if they are only obliged to give 6 months notice, they’re still there 7 years later. Yes it really has been that long.

  67. @Dennis… it certainly isn’t 7years… only just over 6years. MG Rover were still trading up to April 2005 and NAC didn’t buy the ruins staight away

  68. I will not be drawn into further commentary about the MG6 as I have driven extensively three variants and they were all very disappointing in every measurable area (except perhaps luggage space); and well behind the median of class standards. The warranty package, poor finance deals, and antique engine offer kill it stone dead in the water for private buyers with any degree of discernment.
    It is my understanding that SAIC’s lease contains a rolling 6 month break ability, and this is normal in transactions of this type. I do not believe it to be a “cooling off” provision. I did not act on this particular transaction but have been involved in many similar. I would not view the length of lease signed as being in any way demonstrative of long term commitment to the site at all.

  69. Like many others have commented, hardly a surprise is it; the car is plain dull as dish water and a backward step, by some years, compared to the design of the Rover 75/MG ZT which will be, if it is not already, an iconic design.

    The problem is that the Chinese are in their infancy when it comes to decent car design and manufacturing. They also lack the acumen to seek external advise in selecting a truly world beating design team; Their choice, based in Longbridge, have shown us their ability with the MG6 and the zero or whatever name it will ultimately have. By any stretch of the imagination these are cars that do not look right. We all know it.

    When we are dealing with a 5 year gap of manufacturing, coupled with some poor reliability issues going back years, a musical chairs affair with owners, also going back decades, it was always going to be the last chance saloon amidst a gargantuan task to relaunch the name. So far they have failed monumentally and set the image back probably another 5 years. Perhaps they are content to retrench to developing countries’ and their double digit growth in car sales. Lets be honest, this may be their only hope and they probably will not be crying into spilt milk like we are.

    That said I of course salute them for bringing new jobs to Britain, along with an assembly line, for our pride if nothing else but they need to try harder, much much harder.

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