MG to Build First All-New Model in 15 Years at its UK Plant

MG Rover's old Longbridge car plant is set to comeback in a big way when SAIC / MG begins building its first all new car in 15 years at the end of the year. The plant will start producing the MG6 mid-size model from knocked-down kits imported from China, preceding the UK relaunch of MG as a "value brand" in 2011.

The all new car will be available initially as a five-door fastback, with a four-door saloon to follow later on. The automaker optimistically told the Financial Times that customer clinics have compared the MG6 with the likes of the Ford Mondeo, Skoda Octavia and even with small BMWs. Prices in the UK are said to range between £16,000 to £20,000 (US$25,425 to US$31,780).

Shanghai Automotive (SAIC) bought the intellectual property rights to some of MG's cars and engines after the collapse of parent company MG Rover in 2005. Meanwhile, Nanjing Automobile bought much of the production equipment back in 2007.

The latter's 2007 estimate of selling 50,000 cars a year appears to have been rather optimistic, with actual sales being more of the order of, "hundreds, not thousands". The two companies are now merged under the SAIC name.

MG's Birmingham office employs some 300 engineers and 30 design staff, who provide design and engineering services to parent SAIC. MG Birmingham has previously contributed its extensive knowhow to the development of the Roewe 550 and 350 sedans and the MG Zero concept car that was shown at the Beijing Auto Show earlier this year.

Chinese automakers have had no success exporting cars to Western Europe and the United States in the past. MG Birmingham's input is especially important for SAIC, with the Chinese still struggling to make large cars that are competitive with the Europeans. David Lindley, Head of SAIC's Technical Centre explains:

"There's still a lack of capability in Shanghai, and probably will be for years, to design a new vehicle from a clean sheet of paper."

The success of the MG6 is essential for the future of Longbridge and for MG's European operations. At present, Longbridge only builds small numbers of the outdated MG TF roadster.

Only time will tell if MG can buck the trend and recapture the hearts and minds of British consumers. The MG6 will hopefully be the first step in this difficult process.

By Tristan Hankins

Source: FT (sub. req.) , Kudos to Aikiv for the tip!

______________________CHINA-SPEC MG6 GALLERY______________________

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China's SAIC Considering Buying Stake in General Motors

Industry insiders are reporting that China's SAIC has expressed interest in buying a stake of General Motors come its public offering in November, though it has yet to make a solid commitment. GM has declined to comment on the matter.

The U.S. government is eager to unload its 61% stake in GM after taxpayers bailed out / loaned the iconic automaker to the tune of US$50 billion. This comes despite the political ramifications of selling part of the brand to foreign investors or sovereign-wealth funds.

The government has rejected suggestions that the IPO should be limited to domestic investors, however the Treasury has state that no single investor or investor group would receive, "a disproportionate share or unusual treatment."

The Initial Public Offering (IPO) of GM shares will include those held by the U.S. Treasury, a union-managed retiree trust and the Canadian government. The government's plan is to offload their stake in GM in one month, though GM CEO Dan Akerson believes it could in fact take years. The Treasury will wait until after the November midterms in order to keep politics out of the float.

SAIC's bid is not that farfetched, either. Insiders note that SAIC has been building cars with GM in China since the 1990, with its home market a key source of strength for GM. Year-to-date sales were up 19% in August, for instance, even though the U.S. and Europe are still struggling.

By Tristan Hankins

Source: WSJ

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China Hopes to Bully Foreign Companies, Trade Market Access for Electric Vehicle Technology

The chips are finally hitting the fan. China has put the word out there that it may play a big power card in the near future: give us all the secrets to your tech, or we won't let you build and sell in our ever-growing Chinese market.

According to the Wall Street Journal, executives have been given a proposal that would provide China with a majority share in any joint venture involving foreign companies introducing "key new-energy components...such as advanced lithium-ion batteries and high-power electric motors". This would allow China to gain control of the technology that minority shareholders (i.e. anyone else) bring to the table.

In response to this, one anonymous executive said, "[This is] tantamount to China strong-arming foreign auto makers to give up battery, electric-motor, and control technology in exchange for market access. We don't like it." Another executive has claimed this sort of scheme simply "raises the hurdle" in building electric cars in China.

This technology-for-market access trade, in turn, would push China one step further toward its goal of being a world leader in electric vehicles; looks like they'll pass on improving their current vehicles and move straight onto electrics (because by now the Chinese have realized that their own cars are WAY off the mark). Another step in attaining its goal is to consolidate and concentrate its automotive manufacturer base.

Ultimately, China hopes to have three to five manufacturers building globally-competitive electric cars. According to non-Chinese execs, the investment could require up to $15 Billion (100 billion yuan) and no one seems to be sure where the money's coming from; that is, no one is sure how much cash foreign companies will need to invest and how much China's government will put up.

That money, however acquired, would go into manufacturing facilities, suppliers, and infrastructure for China's future electric/hybrid vehicles (estimated to be five million by 2020).

At the World Economic Forum, Chinese Premier Wen Jiabao said, "China is committed to creating an open and fair environment for foreign-invested enterprises...Foreign-invested enterprises in China on the whole enjoy a good environment and have reaped good returns."

Oh, and get this: the Industry Ministry has asked for opinions from state-owned automakers and its fellow ministries to see if anything needs to be postponed and reworked.

That's like asking your reflection if that next shot is a good idea (hint: it always agrees with you). What's worse is that this plan could go into effect NEXT MONTH. Looks like China is getting a little too big for its britches...

By Phil Alex

Source: WSJ

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Ford to Export Canadian-Made Edge SUV to China

Now here's something you don't hear very often these days; a North American-made product exported to China. Yes, it's actually true - even though we're not sure how long it will last for... Ford has announced that the recently refreshed in the States Edge sport utility vehicle, which is built in Ontario, Canada, is on its way to the company's dealers in China with sales set to start in October.

Ford Motor China Vice President Nigel Harris told reporters that the automaker expects modest sales of 4,000 to 5,000 examples of the Edge per year.

However, crossover-sport utility sales in China have been doubling every two years and are already up more than 90 percent in the first seven months of this year, according to the Dearborn-based automaker, so there's a good chance Ford may be able to sell more cars in the long-term.

Currently, SUV sales account for about 14 percent of China's passenger car market, but Ford's research shows 25 percent of car owners in the country would consider a crossover / sport utility vehicle for their next purchase.

"It's a market clearly that we've got to be in, and something that we're particularly good at," said Harris.

The new five-seater Edge will join the Fiesta supermini, Focus compact, Mondeo mid-size sedan, S-Max people carrier and the Transit commercial van in Ford's China market lineup. According to Harris, more cars will be added to the company's range in the near future.

Ford currently ranks 11th in brand sales in China, but its sales have grown from 28,000 vehicles in 2003 when it first entered the country to 164,000 unit last year. Still, that's a far cry from GM's 1.5 million vehicles sold in the first eight months of the year.

Source: Businessweek

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