At the Beijing motor show today the world will see the first new Chinese car
to emerge from the remnants of MG Rover.
The Roewe 550 is a mid-sized car, developed from a model that the
Birmingham-based car-maker was working on when it collapsed into
administration three years ago.
The Roewe’s maker, Shanghai Automotive Industry Corporation (SAIC), was
involved in the project as part of a technical agreement made before MG
Rover failed.
The 550 is based on the Rover 75, shortened, modified and restyled. SAIC owns
the intellectual property of Rover and MG models and has already relaunched
the old 75 as the Roewe 750.
While production of MG Rover-based cars is forging ahead in China, promises
made to restart production at Longbridge, MG Rover’s former Midlands base,
seem far from fruition.
Deadlines for the start of an assembly line in Britain have not been met, and
dealers who lined up to sell new models are still waiting.
Last week Stadco, the British company that was to have made bodies for the new
Longbridge models, pulled out of the project. Analysts now question whether
Britain will ever see the return of Rover to its heartland.
SAIC is China’s biggest car company. For some years it has made vehicles in
joint ventures with General Motors and Volkswagen and is now beginning a
series of own-brand models. The Roewe 550 is the first intended for export
as well as the burgeoning domestic market.
At the end of last year, SAIC took over Nanjing Automobile Corporation (NAC),
which had bought the MG Rover tooling and equipment as well as the MG name.
It had paid the administrator £53m for these.
The Chinese government belatedly called for the two companies to be merged,
partly because it is encouraging consolidation in the industry but mostly
because NAC and SAIC are producing almost identical models based on MG Rover
designs. The merger allowed SAIC to use the MG brand for export.
The unveiling of the 550 comes as motor-industry observers question whether
NAC will go ahead with production of the MG TF sports car at Longbridge.
Deadlines for the start of TF assembly have come and gone. Last December, NAC
told The Sunday Times that the first cars were expected to be available this
month. Production has not begun, however, and the company was unable to give
any indication of the start-up date or when the 55 UK dealers the company
has recruited can expect to receive the first cars.
Officially, the delays have been caused by quality problems with components,
but it is thought that the Longbridge plans have been put on hold by the
SAIC takeover.
NAC undertook to resume production at Longbridge when it bought the remains of
MG Rover. Most of the equipment was taken to China, but the intention was
that TF bodies and chasses would continue to be made in Britain. The cars
assembled at Longbridge would use engines and gearboxes imported from China.
In February 2006, NAC signed a 33-year lease with St Modwen Properties for 105
acres – about a quarter of the factory site. Suppliers, including Stadco
were invited to fit out the assembly plant.
The TF was to be only the start; there was talk of employing 1,200 people and
making 100,000 cars a year, a significant boost to the local economy, which
had suffered badly from MG Rover’s collapse.
By the time NAC made an official announcement of its plans – in July 2006 –
that volume had shrunk to 15,000 cars a year and the workforce was to be
only a few hundred.
The firm said Britons would be able to buy the reborn MG TF in the second half
of 2007 and sales of the MG ZT saloon would resume in Britain in 2008.
Early last year MG TFs prepared in China were shown to potential dealers, some
of whom were part of the old MG Rover network. NAC said: production will
start in May, sign up now and cars will start coming through in the autumn.
Some dealers did, but the cars didn’t. The factory, which employs 140, has
produced only 60 cars – all prototypes.
Last month, the trade journal AM Online discovered that none of the dealers
has yet received a franchise contract. It is clear they will now miss the
summer market for open-topped sports cars.
Last week Tim Parker, regional officer for the union Unite, tried to put a
positive interpretation on Stadco’s withdrawal. He told the Birmingham Post
that it meant the NAC influence was waning, and SAIC was taking charge.
“SAIC is the senior partner and has expertise and financial resources, so we
are a little more upbeat about how the future might look,” he said. “There
is a fairly good chance we will see cars rolling off the production line.”
Some parts of the trade are sceptical about the prospects for a design that is
already 13 years old (the TF was originally the MGF, launched in 1995) in
the face of competition from modern convertibles. SAIC could decide to wait
until it is ready with a new model, or at least undertake a significant
restyling.
SAIC is studying other uses for Longbridge. One possibility is to make the
export version of the Roewe 550 there. Another is to transfer its British
technical centre from Leamington Spa.
SAIC is also considering another route to overseas markets. It owns 51.9% of
the Korean car company Ssangyong, which specialises in four-by-fours and
people carriers and already has a dealer network in Europe.
The engineering of future products for SAIC and Ssangyong is being integrated,
and the parent company is studying the possibility of selling them through
the same dealers.
Ssangyong has recently appointed the Italian firm Koel-liker as its new
distributor in Britain and a Ssangyong-SAIC liaison office is being set up
in south England.
Roewe was a hastily devised name to replace Rover when that brand was acquired
by Ford specifically to prevent it being used by the Chinese.
After its takeover of Land Rover and Jaguar, India’s Tata now has title to the
Rover brand.
Ford bought the name to protect the reputation of Land Rover and did not plan
to use it, but Tata may have other ideas.
ROVER INQUIRY STALLS TOO
When MG Rover was put into administration in April 2005 with the loss of 6,300
jobs, there was a widespread outcry at the role of the “Phoenix Four”, the
group of Midlands businessmen who bought the company in 2000.
John Towers, Peter Beale, John Edwards and Nick Stephenson bought the group
for just £10, and took out millions in salaries, pension contributions and
other benefits during their years in charge.
Ministers decided to set up an independent inquiry into the company’s demise
and, to carry it out, they appointed Guy Newey QC and Gervase MacGregor, a
senior partner at BDO Stoy Hayward, the forensic accountancy firm.
They were expected to report within 18 months, but three years later there is
still no sign of anything being published.
The inquiry has attracted unfavourable comment because of its mounting cost.
Last October, the government disclosed that the bill had passed £10m.
“It’s gone well beyond a joke,” Richard Burden, Labour MP for Birmingham
Northfield, which includes Longbridge, told the Birmingham Post.
“I simply don’t understand why it is taking so long to produce the report and,
until it is published, we shall never achieve closure.”
Meanwhile, the Longbridge site, a car plant for 100 years, is quickly
changing. The Chinese have taken 42 of the 190 hectares, with the rest being
redeveloped by property group St Modwen.
