Press Comment : SAIC Motor steps up ambitions with MG6 production

David Bailey, Birmingham Post

The first MG6 rolled off the production line at Longbridge yesterday, six years to the week since MG Rover collapsed into administration. It was a highly symbolic moment as so far just a few hundred MGTFs have been assembled at Longbridge and the start of MG6 production marks a significant step up in SAIC Motor’s UK operations and ambitions.

Let’s be clear, though: MG6s rolling off the production line does not mark the return of mass production to Longbridge. Rather, we are seeing small scale, limited assembly and testing of vehicles, with semi-finished cars imported from China and finished off at Longbridge. Indeed, with components coming from China, the wider benefits for the regional economy are limited.

However, this is still a welcome move in a number of ways.

Firstly, the car has been developed in the UK by MG’s Design Team at Longbridge – where some 300 Designers and Engineers now work on developing a range of models for parent firm SAIC Motor. Indeed, MG’s design operations are an impressive testimony to the West Midlands’ skills in automotive design.

Secondly, MG6 assembly – maybe running to 3000 units a year –  is potentially the first step in a range of models being assembled at Longbridge. Next will be a saloon version of the MG6, then perhaps a smaller hatchback. Production may eventually get into the tens of thousands, hopefully featuring a two-seater open-top sports car in the true tradition of MG.

Higher volumes could bring more jobs in assembly, and – perhaps – some scope for more sourcing of components locally. More use of the latter could, in turn, bring some benefits for the wider economy, and is something that policymakers need to encourage.

Meanwhile, SAIC Motor is still thought to be talking with General Motors in an attempt to gain access to the firm’s British sales network. It’s thought that GM’s Vauxhall Dealer Development staff are helping set up such a network for MG.

This wouldn’t see MGs and Vauxhalls sold in the same dealer showrooms, though, Vauxhall have said – although it didn’t say that MGs wouldn’t be sold next door to existing showrooms as dealers expand their range of brands on offer (think of MINI dealers next door to BMW dealers).

Kevin Wale, President and Managing Director for GM’s China operations, said earlier this year that ‘we have agreed in an MoU that we would discuss the potential for MG to be distributed in the UK… and that’s what we are doing at the moment.’

GM UK stated that ‘SAIC and GM have a significant joint venture in China. As a part of the General Motors Corporation (the UK is GM’s fourth largest market) Vauxhall is pleased to assist its global organization.’

Such a deal, if and when completed, would be unprecedented. It would mark another milestone in the relationship between SAIC Motor  and GM which has lasted for 13 years, and it would make SAIC Motor the only Chinese automaker to secure access to a western partner’s overseas Dealer Network.

Chinese firms have, so far, pretty much concentrated on their rapidly growing home market, with only limited exports abroad by smaller players like Geely and Chery. Access to GM’s network in the UK and potentially beyond would be a huge help for SAIC Motor, which – like other Chinese producers – has had virtually no exposure to the European market so far.

Many of us have said for some time that the Chinese are coming. It’s a question of when. While a substantial design and development team has been set up at Longbridge, the actual assembly of cars like the MG6 will likely remain pretty small scale in the short to medium run.

That, however, might change longer term if MG can regain a foothold in the market. In that case, the first production car to roll off the line yesterday may have much greater significance than we think.

[Source: Birmingham Post]

[Editor’s Note: Professor David Bailey works at Coventry University Business School. This is an edited version of an article which was originally published on the Birmingham Post’s website earlier this week.]

Clive Goldthorp

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