Edited by Clive Goldthorp
Got a story, or link to one on the web? Email Clive Goldthorp at
news@aronline.co.uk.
Top stories
1 April : MG dealers still await
cars and contracts
2 April : News digest
9 April : MG is back on the road
12 April : Face to face with William
Riley, XPower man...
13 April : News digest
14 April : MG: any closer to that
promised revival?
15 April : News digest
16 April : News digest - extra
17 April : Stadco Limited and Longbridge:
the bigger picture examined…
18 April : Shanghai and Nanjing
to fly in for MG talks at Longbridge
19 April : SAIC Motor Aims to Re-Open
UK Factory This Year
20 April : Geoff Polites, CEO, Jaguar-Land
Rover, dies
20 April : Roewe 550 unveiled
at Beijing Motor Show
21 April : SAIC plans UK comeback
for MG TF roadster
22 April : SsangYong: on the up
in the UK?
24 April : News digest
27 April : News digest
News digest
Compiled by CLIVE GOLDTHORP
1) SAIC Motor/MG and Roewe
SAIC bosses fly in to assure MG workers at Longbridge
Duncan Tift, Business Staff, Birmingham Post 25th April, 2008
A car similar to this speculative rendering of a new MG-badged sports hatch
might just be the model to
revitalise production at Longbridge. (Picture: Michael
Wren)
THE Chinese owner of MG Rover has assured workers at Longbridge
that the plant has a long term future. Senior managers from Shanghai Automotive
(SAIC) - including president Chen Hong - visited the factory on Thursday to
make a presentation to workers and to reassure them about their jobs.
The delegation has also held talks with Birmingham council leader
Mike Whitby to assure him of the company’s intentions. Mr Chen said the
purpose of visiting Longbridge was to make sure that everything was on track
for the resumption in production of the MG TF sports car. Mr Chen, speaking
at the Beijing motor show at the weekend, said that production of the TF would
resume in July and would be ready for delivery the following month.
Attending yesterday’s presentation was MP Richard Burden
(Lab: Northfield), who said he had been impressed by what the Chinese had had
to say. "They we aware of all the speculation surrounding the plant but
there was no ambiguity in what they said - they were clear that Longbridge had
a long term future with them and that they were still looking to resume production
of the TF in the summer," he said.
"They were upbeat and quite realistic and I came away impressed
by what I had heard." The MP said the company had also told him they were
looking at a strategy for the future development of the site beyond 2010. The
sports car was only ever likely to be produced in small volumes but this was
always the intention of Nanjing Automotive (NAC) when it originally beat SAIC
in the race to acquire MG Rover three years ago.
SAIC is a larger company and now it has successfully integrated
NAC following a merger at the end of last year, it is looking at things on a
larger scale and one of the proposals is thought to involve using the UK as
a regional manufacturing/research and development hub for the global business.
This could possibly involve spare capacity being utilised at Longbridge for
the manufacture of cars for distribution to the UK and European markets.
There has been speculation over the past week that this could see
a European version of the Roewe 550 - originally conceived by MG Rover as a
replacement for the Rover 45 - being made at the plant. The car has gone on
display in China this week and has been attracting a lot of positive comment.
As far as the UK supply network is concerned then things are not so positive.
Mr Burden said the company had told him that local suppliers were
receiving no guarantees about future work as SAIC had made it clear they would
source components globally in order to get the best deal. "We have to ensure
that we retain strong links with the company and so the onus is on suppliers
to ensure that they can provide quality products at the right price," said
the MP. Speculation over the future of the plant flared when body-shell supplier
Stadco announced two weeks ago that it was pulling out of a deal to supply panels
for the TF, putting 30 jobs at risk.
Nanjing refuses to meet unions
Jon Griffin, Birmingham Mail, 24th April 2008
NANJING has refused to talk to unions about the long delayed Longbridge
MG project for nearly six months, because the HR manager is on maternity leave.
The Chinese car firm has rebuffed all requests for meetings from senior Unite
UK car industry negotiator Dave Osborne since last November.
Union bosses today revealed that the reason cited by the Chinese
is that HR Manager Louise Lane is absent on maternity leave. Gerard Coyne, regional
secretary for the T&G arm of Unite the union, said today: "It's utter
nonsense. She is on maternity leave, and the response has been that 'we cannot
discuss anything until she returns'.
"This is not about HR matters. It's about the strategy, it's
about what the future holds for Longbridge. They clearly are struggling to operate
in a democratic environment. We are not talking about individual workplace issues
here, but the HR Manager is having a baby, so we cannot have a meeting with
them. "Dave Osborne sent them several letters since SAIC took over and
he wrote to them again relatively recently. He has not had any response at all.
You kind of get the feeling that nobody is in a position to make any statements.
The media's experience of Nanjing is mirrored by ours. We are as much in the
dark as is humanly possible."
Mr Coyne said unions were anxious for answers to key questions
following Nanjing's joint decision with parts specialist Stadco to scrap the
body shell assembly at Longbridge, with the potential loss of 30 jobs. "There
are bigger questions that flow from this decision. Will there be manufacturing?
Will there be research and development facilities? Or is it just going to be
screwdriver assembly?"
Mr Coyne said Nanjing should relinquish its land for regeneration - and
potential new jobs - if volume production was no longer on the cards.
Nanjing's UK Director of Communications Eleanor De La Haye could not be
contacted for comment.
(Editor's Note: AROnline understands that NAC MG UK Limited's Corporate
Communications Manager, Eleanor De La Haye, was, in fact, working in China
last week)
Back to top
News digest
Compiled by CLIVE GOLDTHORP
1) SAIC Motor/MG and Roewe
Hopes rise for MG production at Longbridge
Duncan Tift, Business Staff, Birmingham Post 22nd April, 2008
MG version of the Roewe 550 to be produced at Longbridge?
Fresh hopes have emerged that car production at Longbridge does
have a future. Shanghai Automotive (SAIC), which took over Nanjing Automobile
at the end of last year, has announced that production of the MG TF sports car
will be relaunched in July and on sale in August – 11 months later than
originally planned.
After weeks of speculation about the future of the sports car project
– doubts being fuelled by the withdrawal of body-shell manufacturer Stadco
from an agreement to supply panels and a lack of comment from China –
SAIC used the launch of the prestigious Auto China 2008 exhibition in Beijing
to announce that it would resume production of the TF in China at the end of
this month and follow it up some three months later in Longbridge.
Industry experts and suppliers have welcomed the move although
they are still cautious about the amount of British involvement in the project.
In a statement to support the TF’s appearance at the motor show, SAIC
said the model had "remarkable significance" and that it was the first
genuine sports car [by Chinese standards] to represent the "brand personality
of MG – Release, Passion and Fun".
SAIC also said that 2008 represented a fresh start for the company
– indicating its integration of Nanjing. Yang Junhu, vice general manager
of MG, said: "MG TF is the best symbol to represent MG brand, because of
its high-end market position, passionate and stylish design concept, and its
long racing history. MG TF will certainly make positive and deep influence on
the Chinese sports-car market."
SAIC said it had delayed the project in the UK because it wanted
to reassess it following its merger with Nanjing at the end of last year and
because of concerns about the quality of some of the components being shipped
over from China. The Chinese commitment would appear genuine and has been reinforced
by comments from Conservative MEP for the West Midlands, Malcolm Harbour, who
met SAIC president Chen Hong in a private meeting at the end of March.
"Mr Chen had asked me to keep the details of the meeting secret
until now but he told me that the intention was to relaunch production in the
summer with the cars being offered for sale shortly afterwards," he said.
Mr Harbour, who worked at Longbridge for many years, added that he "warmly
welcomed the news". He also confirmed the suggestion that SAIC had delayed
relaunching production because it was unhappy with some of the quality aspects
of the project.
"He [Chen Hong] explained that the delay in announcing the
start of MG TF build was to ensure that he was personally satisfied that the
quality of the relaunched car would be fully competitive," he said. Rachel
Eade, programme manager for automotive supply chain agency Accelerate, said
she was pleased with the announcement because of all the recent speculation
about the project. "What we need to look at is how big a role the West
Midlands supply chain will play in the production of the cars and this is something
we are keen to explore with the Chinese," she said.
Professor David Bailey, of Birmingham Business School, said: "There
are still concerns about the manufacture of the cars and it would appear there
are going to be far fewer linkages with the local economy than we previously
expected. "It rather looks like its going to be a case of just screwing
together bits brought over from China."
He also said doubts had to remain about whether the car was still
a viable concept for the European market, bearing in mind stricter emissions
legislation and competition from rival manufacturers.
SAIC has not given any details on production levels or costings,
other than to say that the price would be "competitive".
PWC chief optimistic for future of Longbridge
John Duckers, Business Editor, Birmingham Post
Longbridge could still have a future under its Chinese owners,
according to the Midland boss of the accountancy firm which handled the fallout
from the crash of MG Rover. David Waller, PricewaterhouseCoopers' regional chairman
and Birmingham senior partner, said he wanted the city to reach out to SAIC/Nanjing
and offer it positive encouragement.
He did not spell out exactly how, but is thought to favour a major
incentives package to persuade the Shanghai partnership that Longbridge could
yet be a success even if it does not involve full car production. "There
is still every possibility of a big win/win," insisted Mr Waller. PwC were
the administrators of MG Rover; indeed the administration is not yet at an end
even though the group went down in 2005.
On Saturday The Birmingham Post revealed SAIC's global partnership
with Volkswagen had led industry analysts predicting the Birmingham plant will
be pushed further down the Chinese carmaker's list of priorities. Mr Waller
told The Post: "We should be saying to SAIC - whatever your strategy we
can help you be a gateway into the European market."
But he believes it could ultimately mean Longbridge plays a somewhat
different role to what has been outlined to date. The MG TF line still exists
at the plant, offering hope that production might resume eventually. He said:
"I think the Chinese want to get into the volume market. But if they want
a presence in the market place then they have to have a physical presence."
Wherever the components are made, in China or in the Midlands,
he suggested they could still be shipped into Longbridge and screwed together
in final model assembly. And if that was not a runner, then there could be opportunities
in terms of technical development and at the very least as a parts, servicing
and repairs operation.
"I think things could still happen at Longbridge but perhaps
not in the way we thought they would," said Mr Waller. "As a region
we have to persuade them that there is a way forward." He believes to that
extent there is a major role for Birmingham City Council and regional development
agency Advantage West Midlands to play. It all depended on whether there was
a strategic will to make something happen.
"We need to talk to SAIC and be positive about the way we
can support them." But he accepted that SAIC appeared to have a different
strategy to Nanjing. "They are more heavily focused on rapid development
in the local Chinese market which means overseas investments would not be as
high on the priority list."
But they still should be encouraged to consider the West Midlands
even though for the moment there were Government constraints making it difficult
for Chinese firms to expand abroad. Those constraints would eventually ease.
And, just as India has started investing overseas, highlighted by Tata's purchase
of Jaguar and Land Rover, and previously steel maker Corus, so would come the
day when the Chinese followed suit. And it would not just be the automotive
sector in the West Midlands which would prove attractive to them - so would
areas like medical equipment, engineering and ceramics.
SAIC may base European research at Longbridge
Duncan Tift, Business Staff, Birmingham Post 23rd April, 2008
Shanghai Automotive (SAIC) could be preparing to make Longbridge
its major European centre for research, development and car production –
guaranteeing the long term future of the plant. Fresh from announcing it is
to resume production of the MG TF from July, the Chinese company has led observers
to believe it is planning further developments for the Birmingham factory.
SAIC is believed to want to follow the model of Tata, which is
in the process of acquiring Jaguar and Land Rover from Ford, and use the West
Midlands as a base for European operations. When SAIC originally failed to acquire
the former MG Rover company – losing out to Nanjing Automotive (NAC) –
it set up a research wing with Ricardo at Leamington Spa, taking with it 300
of the best minds from Longbridge.
Following the merger with NAC at the end of last year, SAIC has
said it is now keen to develop European exports. Rumours have persisted in recent
weeks that a new car project was being developed for Longbridge to make use
of spare production capacity. This could see UK production of the company’s
new Roewe 550, which was under development in the final days of MG Rover as
a replacement for the outdated Rover 45. The mid-range saloon has gone on display
in China and has already attracted positive comment.
The link-up with Longbridge has been given credence by comments
from Conservative MEP for the West Midlands Malcolm Harbour, who had a meeting
with SAIC president Chen Hong at the end of last month. Mr Harbour, who has
only now been cleared to divulge the results of the meeting, said: "I am
confident that, if the MG TF launch goes well, SAIC will make Longbridge their
major European centre for research, development and production.
"They are investing in new models for their Roewe brand, and
I was given a confidential briefing of their future plans." He said that
the Leamington Spa-based engineers were already working on some of the new designs.
"Mr Chen assured me that, following their acquisition of NAC, Longbridge
would be part of their long term strategy of developing their own car brands
and increasing sales outside China," added Mr Harbour.
He said what had to happen now was that all agencies associated
with Longbridge needed to work together to develop a sustainable regional economic
strategy that would ensure SAIC had everything in place it needed to develop
a successful operation. MP Richard Burden (Lab: Northfield) said: "We need
to identify opportunities and work with SAIC to show them what we have to offer.
"People have to accept that Rover is gone and it’s not going to come
back – the only thing to do is move forward."
2) TATA Motors/Jaguar and Land Rover.
Strong international sales and technical expertise have
resulted in Land Rover winning not one but two Queen's Awards for Enterprise.
Land Rover Press Release 21st April, 2008
Land Rover has received the award for International Trade for an
outstanding performance in increasing export sales by 52 per cent to nearly
£4bn a year, an increase of £1.3 billion in three years. Land Rover
also won the award for Innovation for its patented Terrain Response System.
Available on all Land Rover models, apart from Defender, Terrain Response sets
up the vehicle's engine response and traction to maximise performance on all
surfaces. It is the electronic equivalent of having an expert instructor next
to the driver.
Phil Popham, Land Rover's Managing Director, said, "To win
not one but two Queen's Awards is a considerable achievement and a testament
to Land Rover's relevance and modernity in its 60th anniversary year. It demonstrates
we are building and selling desirable and technically advanced cars around the
world and generating significant wealth for Britain."
Land Rover exports over 75 per cent of the production of its Defender,
Freelander 2, Discovery 3, Range Rover Sport and Range Rover vehicles to 147
countries around the world. Land Rover achieved a third successive year of record
sales in 2007, with a total of 226,395 sales, versus 192,511 in 2006 and 185,120
in 2005.
This represents a 17.6 per cent increase on the previous year.
Sales for the first quarter of 2008 are 57,859, up 13% on the same period last
year. Emerging markets are helping to drive sales – Russia is currently
running 176% ahead of last year with 4,690 sales and China is ahead by 224 per
cent with 3239 sales.
Tata gets US antitrust OK for Jaguar, Land Rover
Reuters, Automotive News Europe 24th April, 2008
WASHINGTON (Reuters) -- U.S. antitrust authorities have cleared
India's Tata Motors Ltd.'s purchase of Jaguar and Land Rover from Ford Motor
Co.
Antitrust authorities completed their review of the $2.3 billion
deal without taking any action to block it, the U.S. Federal Trade Commission
said in a notice issued on Wednesday. In March, Tata announced it would buy
Jaguar and Land Rover, giving the Indian automaker a line-up of products ranging
from the world's cheapest car to some of the most expensive.
3) India Watch.
Pininfarina plans R&D centre in India
Staff Report, Automotive News Europe 24th April, 2008
TURIN -- Pininfarina plans to establish a research, design and
engineering centre in Pune, India, this year with support from Tata. Pininfarina
and Tata have signed a letter of intent, which says that Tata will support the
Indian center with contracts and participate with a minority interest. Pininfarina
will be the majority shareholder with management responsibility.
"This agreement witnesses the great attention Pininfarina
is dedicating to an emerging and highly developing market such as the India
one," Andrea Pininfarina, CEO of Pininfarina, said. "Thanks to our
partner, one of the worldwide major automotive manufacturers with strong roots
on the Indian market, we will reach a higher excellence level in the design
and engineering sectors."
Pininfarina's research, design and engineering center will offer
its services to other Indian and international automakers.
Back to top
SsangYong: on the up in the UK?
CLIVE GOLDTHORP
SsangYong's diesel hybrid drivetrain will usefully boost economy and lower carbon
emissions...
AROnline’s main focus recently has been on Tata Motors Limited’s
acquisition of Jaguar and Land Rover, the consequential chances of a Rover revival,
SAIC Motor Corporation Limited’s just completed merger with Nanjing Automobile
Company and the impact of that deal on the future of the MG and nascent Roewe
brands.
However, SAIC Motor also has a controlling 51.9 per cent stake
in South Korea’s SsangYong Motor Company so that brand’s current
re-launch in the UK merits closer scrutiny. Paul Williams, the Managing Director
of SsangYong’s new British distributor, Koelliker UK Limited (KUK), has
moved rapidly to review the brand’s Dealer Network here and to re-position
the three current model ranges: Kyron, Rexton and Rodius.
Williams has initiated an apparently Alfa Romeo UK-like restructuring
of the 50-strong Dealer Network which KUK inherited and, having retained just
29 franchisees, now aims to increase the number to 70 by the end of 2008 and
to 100 by 2010. KUK has also re-priced and re-specified all three current models
and, for example, now firmly pitches the Kyron against the likes of the Kia
Sorento and Hyundai Tucson and the Rexton against the Hyundai Santa Fe. Williams
intends to target “farmers, builders (and) people who need to tow such
as caravanners, horse and boat owners” with the Kyron and Rexton SUVs
while “looking at the taxi trade for the Rodius.”
KUK has now disclosed that SsangYong plans to invest more than
€1.9bn. in 20 new models, based on five different platforms, with five
new engines and with monocoque construction, and which are all intended for
introduction between 2009 and 2014. These vehicles, which are likely to feature
the new diesel hybrid technology which SsangYong announced at last month’s
Geneva Motor Show (See photo), may have some design input from the Italian company
which was responsible for the Rexton: Italdesign.
Paul Williams commented that: “I have been able to see some
of the new models and although I can’t reveal any details, I’m very
excited about what’s coming. It’s unlikely that all 20 will be appropriate
for the UK, but it will mean a wider and more attractive range with much greater
choice for customers. There will be different body styles and engines including
passenger cars that will enable us to compete strongly in new market sectors.”
“A move into more mainstream cars” will clearly be
a significant feature of SsangYong’s Future Product Programme but how
that will be integrated within SAIC Motor’s overall Brand Development
Strategy has yet to be revealed. Indeed, given the recent report that SAIC Motor
might now be evaluating the export of Roewe-branded cars to Europe, AROnline
reckons that SAIC Motor’s overall Brand Development Strategy may still
be a work-in-progress and that the company should, perhaps, even be giving serious
consideration to replacing Roewe with one of the BMC legacy brands acquired
as a consequence of the merger with Nanjing Automobile Company.
SAIC Motor apparently rejected the idea of reviving either of the
company’s own legacy brands of Phoenix and Shanghai prior to opting for
Roewe but now has access to the IPRs for the likes of Austin, Morris, Sterling
and, by virtue of last year’s JV between NAC MG UK Limited, HFI Automotive
Limited and Healey Automobile Consultants Limited, possibly even (indirectly)
Austin-Healey.
A re-branding of Roewe may, in fact, be the only way to avoid a
potentially expensive and protracted IPR dispute should a Tata Motors Limited-owned
Jaguar and Land Rover actively market Land Rover in China and/or launch “Roverised”
versions of the Tata Indica V3 as Rovers in Britain and Europe within the next
year or two. Indeed, the adoption of a BMC legacy brand might just be the most
cost-effective and, more importantly, quickest fix for that, not so unlikely,
problem.
SAIC Motor would still, of course, have to address the issue of
how to position MG, SsangYong and, say, Sterling, within the “Global Automotive
Brand Hierarchy” and, in addition, ensure that each brands’ core
attributes were both clearly identified and reflected in their distinctive product
ranges.
Ray Hutton’s report in last weekend’s
Sunday Times indicates that “a SsangYong-SAIC liaison office is being
set up in south(ern) England” so, perhaps, the task of differentiating
between SAIC Motor’s various brands has now begun. However, what that
might mean for SsangYong’s long-term future in the UK remains to be seen...
Back to top
SAIC plans UK comeback for MG TF roadster
JOHN REED, Financial Times
SHANGHAI Automotive (SAIC), China’s largest locally-owned
carmaker, is to resume production of the iconic MG TF roadster at its UK plant
in July, according to its president.
With plans to resume MG production at its plant in Longbridge,
the carmaker is also to consider exporting its own-brand, Chinese-made Roewe
cars to Europe, Chen Hong told the Financial Times on Sunday. SAIC, which merged
with its smaller regional rival Nanjing Automobile last year, intends to resume
production of the TF at the end of this month in China, three months before
its planned production date in the UK.
“We will try to launch production at the end of July and
bring the car to market at the end of August,” Mr Chen said. MG has 55
dealers in the UK, and also plans to sell its roadster in Europe. NAC bought
the MG brand and its production assets in 2005, and shipped most of the plant
to Nanjing. SAIC acquired the rights for some of the carmaker’s models,
which it renamed Roewe.
SAIC, which has joint ventures with General Motors and Volkswagen
– China’s two largest foreign carmakers – wants to build up
its own brand to cash in on China’s booming car market. Mr Chen said a
possible launch of export sales into eastern and western Europe was being considered.
In a country in which carmakers are establishing themselves and fighting foreign
brands for market share, SAIC touts its British ties.
Its stand this week at the Auto China show in Beijing was adorned
with images of Tower Bridge, William Shakespeare, a red telephone booth and
a teapot with cup of tea. The TF model has a large fan base in Europe and the
US, but has been off the market for three years in an industry characterised
by rapid product improvements. Mr Chen said its pricing would be "competitive".
SAIC delayed the TF relaunch because of the merger as well as concerns
about ensuring its quality. “The manufacturing consistency is stable,
and we’re very comfortable with the quality,” Mr Chen said. Supplier
company Stadco, which had been expected to provide body panels for the TF, withdrew
from a supply deal. The brand will now source them from China, Mr Chen said.
Back to top
Roewe 550 unveiled at Beijing Motor Show
KEITH ADAMS
IT'S one of the most scooped cars ever to grace AROnline, but finally
after a gestation period of nearly three years - and that excludes the time
spent in its former incarnation as the RDX60
- the wraps have come off the Roewe 550... and it looks remarkbly good.
You can read the whole story as it unfolded on the Roewe
pages of the website, but needless to say, it's been a joint Anglo-Chinese
venture, and a frustrating insight into what might have been had MG Rover and
SAIC been able to get it together back in 2004, when the chance was there to
do so. Had that happened, we'd have been looking at our 45/ZS replacement -
perhaps with a European twist for the domestic market versions.
Interestingly, an AROnline insider close to Longbridge tells us
that SAIC Motor is indeed looking seriously into the idea of producing this
car in MG form in the UK, and although the odds of this happening are currently
running at 'something less than 50-50', it is definitely on the agenda, alongside
the re-invigorated MG X120 sportscar project to replace the on-off-on-again
TF LE 500. An MG-badged, Longbridge-built, version of the Roewe 550 would almost
certainly have a much greater impact on the key UK and US markets. Time will,
no doubt, tell.
However, for now, it's good to see the car has finally made it...
and let's hope it performs better on the Chinese market than the slow-selling
750...
See the Auto Sina picture gallery here
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Geoff Polites, CEO, Jaguar-Land Rover, dies
FORD Press Release
Geoff Polites, chief executive officer of Jaguar Land Rover, has
died peacefully in his home country of Australia. He was 60. Mr. Polites, who
is credited with leading the team that returned the Jaguar Land Rover business
back to profitability and successfully steering it through its ongoing sale
process to Tata Motors, had been battling serious illness for the past two years.
"Geoff’s untimely passing robs his family and friends
of a man who was a real inspiration to us all," said Alan Mulally, president
and chief executive officer, Ford Motor Company. “His drive and determination,
combined with his clear sense of vision for the business, played a huge role
in turning round the business at Jaguar Land Rover and returning it to profitability.
Geoff ensured that Jaguar Land Rover was not distracted and continued to focus
on the fundamentals of the business during the recent sale process, despite
at the time also fighting his own personal health battle.
"He was a trusted colleague and someone who was much respected
not just by his peers but by all who had the privilege to work with him. Our
sympathies are with his wife and family at this difficult time," said Mulally.
Lewis Booth, executive vice president responsible for Ford Motor
Company’s businesses in Europe, said: “For many of us at Ford and
Jaguar Land Rover, we’ve lost not just a respected colleague but a great
friend. "Geoff was always someone to look up to throughout his almost 40-year
career in the automotive industry. His passion for the car business was legend,
but the resolve he showed since taking over as CEO of Jaguar Land Rover in 2005
was something very special. His leadership of the team that has put the Jaguar
Land Rover business back into profitability has been exceptional. Geoff has
given Jaguar Land Rover the solid foundation and established the strong management
team it needs for a successful future. We will miss our friend very much."
David Smith, Jaguar Land Rover’s chief financial officer,
will take over as the acting chief executive officer at Jaguar Land Rover until
a successor is appointed.
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SAIC Motor Aims to Re-Open UK Factory This Year
IRENE SHEN, BLOOMBERG
SAIC, China's biggest automaker, plans to re-open a Longbridge,
UK car plant in the second half of the year, resuming production at a factory
that closed three years ago when MG Rover Group Ltd. collapsed.
The factory will initially make MG TF roadsters. It may add other
models later, Vice Chairman Chen Hong said today in an interview at an event
to mark the opening of a Beijing research center. He didn't say how many cars
the plant would make a year.
SAIC Motor, Great Wall Motor Co. and other Chinese carmakers plan
to open factories overseas as rising domestic competition crimps profit margins.
The Longbridge plant, in central England, employed 6,000 workers when production
was halted in April 2005.
"MG's customer loyalty will continue to support sales in Europe,''
said Yale Zhang, a Shanghai-based director at CSM Asia, which advises automakers.
"Europe is SAIC Motor's most important overseas market, although China
is the company's first priority because of the strong demand here."
The MG Owners' Club is the largest in the world serving a single
marque, according to its Web site. Trial production at the Longbridge plant
began in May.
Nanjing Automobile Group Corp., which bought the MG brand for £53m
in 2005, also planned to open a plant in Oklahoma. This project is now being
reviewed after SAIC Motor agreed to buy Nanjing Auto's auto-making assets last
year.
"It's hard to say if we'll continue that plan before the assessment
is completed,'' said Chen.
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Shanghai and Nanjing to fly in for MG talks at Longbridge
DUNCAN TIFT, Birmingham Post
THE fate of car production at Longbridge looks uncertain that a
high level delegation from Shanghai Automotive and Nanjing is to visit the plant
for crunch talks later this month. Sources have told The Birmingham Post that
the visit could decide the long-term future of the MG Rover plant.
Fears about the site have been rife during past week following
a decision by a major supplier, Stadco, to pull out of an agreement supplying
body panels to the MG TF sports car. A wall of silence has been erected around
Longbridge and despite repeated attempts to gain information from the Chinese
about their plans, nothing has been forthcoming.
Worryingly, politicians have also been reluctant to comment on
the situation. Now, Rachel Eade, programme manager for supplier support agency
Accelerate, said she had been told that a Chinese delegation was to visit the
plant at the end of April.
"I’m led to believe that an investment decision on the
future may well be taken," she said. "Considerable time, investment
and goodwill have been channelled into restoring some form of manufacturing
to Longbridge and we are still hopeful that this will eventually take place.
"There are a small but significant number of West Midlands companies involved
in the process already and, whilst the latest news was not encouraging, there
are still a good number of firms who are keen to work with the Chinese to make
this happen," she added.
The visit could focus on the merger of SAIC and Nanjing after Christmas,
but the timing of the trip is worrying many observers. There have been a string
of problems with the sports car project since its initial relaunch last summer.
Despite a fanfare for the media last May, very few of the cars have been produced
and none have found their way into showrooms despite dealers being primed for
delivery since September.
Late last year, production was hit due to problems with components
being shipped from China and this was thought to have delayed delivery until
March. Ironically, UK engineers who have moved from MG to Nanjing and SAIC are
in China at the moment rectifying quality issues. However, the delayed date
for delivery has now passed and still no cars have appeared.
Stadco said it was withdrawing from its contract for "commercial
reasons". It is thought the company was fed up of the repeated delays and
was not seeing any return on its investment. Suppliers confided to The Post
that they were worried about the situation and feared that the company would
decide to manufacture all components in China and then ship them to the UK for
assembly – if the project was still viable. Industry insiders believe
that despite the iconic MG brand, the TFs time has already gone and that a new
model is needed.
The Chinese had appointed 50 dealers in the UK last summer ready
for the scheduled launch in September. However, the dealer network is also in
the dark and despite being pressed, Nanjing has not said when it will be able
to supply them. Again, just as with suppliers, dealers are also struggling to
get information.
Luffield Cars in Loughborough, Leicestershire, was the first UK
dealer appointed to sell the TF but nine months on and there are still no sports
cars in its showroom. Managing director David Woods said: "We can’t
get anything out of their communications people at all. I wrote to them at the
end of March and the reply was extremely vague." He said they dealership,
which is now selling Citroens, still had 800 MG customers in its database and
many had expressed interest in the sports car.
"I’m not saying they were breaking down the doors trying
to buy one but they were interested. However, we can’t tell them anything
because we don’t know anything – it’s all one-way traffic,"
said Mr Woods. "The SAIC takeover probably put things back slightly but
I would have thought they’d have been over that by now. There’s
enough British guys connected with the project to know what’s required."
Nanjing was thought to have the capacity to produce around 15,000
TFs this year if there was demand. There was also talk that in 2009 it would
take on production of the MG5, a new car based on the old Rover 45.
SAIC boss Chen Hong set for crucial talks at MG
The man at the helm of the Longbridge project is to jet into Birmingham
from China next month for talks which could seal the fate of plans to relaunch
MG TF. Chen Hong, President of Shanghai Automotive Industry Corporation is pencilled
in for a visit to the car factory in May. The visit comes amid mounting speculation
that mass car production will never restart at the Birmingham car factory under
the plans by Chinese partners SAIC and Nanjing Automobile.
Some car industry experts believe the visit could spell the end
for the Chinese reign at Longbridge, although Nanjing are currently locked into
a long-term lease with Birmingham landlords St Modwen for the rent of around
100 acres of land. Unions have already expressed fears that Longbridge could
be reduced to a "screwdriver assembly" project assembling kit cars
imported from China.
It is understood that the Chinese may already have decided to ditch
the UK relaunch of the MG TF two-seater and concentrate on the Chinese market
through production of MGs at the new factory in Nanjing. Unions in Birmingham
have been pressing for talks with Nanjing/SAIC since last November to raise
concerns about the painfully slow progress of the Chinese project ever since
NAC bought the assets of MG Rover for £53 million in July 2005. Unite
senior UK car industry negotiator Dave Osborne has accused the Chinese of "cold-shouldering"
the unions over requests for face to face meetings to air their concerns.
A source said today: "Chen Hong, the president of SAIC, is
due to visit Longbridge in May. Whether the Chinese will then announce the end
of the MGTF project is open to speculation." Rumours of an impending collapse
of the Chinese plans have been rife since body shell specialist Stadco pulled
the plug at Longbridge with the loss of around 30 jobs, before a single new
Chinese-built MG has entered a UK car showroom.
Nanjing pledged to produce 100,000 MGs a year within five years
at Longbridge, but the deadline for a start of volume production has been continually
shelved.
Back to top
Stadco Limited and Longbridge: the bigger picture examined…
CLIVE GOLDTHORP
The recent announcement that Stadco Limited will, for commercial
reasons, be ceasing production of the bodyshells for the MG TF at Longbridge
generated more than a little pessimistic press coverage in both the Automotive
Industry and regional media. However, upon closer scrutiny, that negative media
response may not be entirely justified.
AROnline understands that NAC MG UK Limited (NAC MG) and Stadco
Limited (Stadco) agreed the contents of a joint Press Release with each company’s
version having an additional, company specific, paragraph. NAC MG was to respond
to any press enquiries and a Q&A Fact Sheet was prepared for that purpose.
NAC MG’s version of the Press Release and the Q&A Fact Sheet are reproduced
in full below:
Press Release
Stadco and NAC jointly confirm that for commercial reasons, production
of bodyshells for the MGTF by Stadco will cease. Both parties are working to
ensure minimum disruption to the workforce.
NAC remains committed to the re-launch of the MG TF and Longbridge.
To date it has invested £38.4 million including research and development
in the project and is working to ensure that its products are of the very highest
quality. It is not thought that this current situation will affect the TF launch.
Stadco was the MG TF body welding supplier to MG Rover. In September
2006 NAC and Stadco signed a one off purchasing agreement for the relocation
and installation of assets in addition to technically supporting the replication
of these production assets in Nanjing, China.
Q&A Fact Sheet
What are the commercial reasons to which your statement
refers?
The business models presented by both parties are incompatible
on a number of issues, these predominantly being volume and quality. Initial
volume production for the TF is insufficient for Stadco to make a profit, making
the venture uneconomical for them.
Further, NAC currently manufactures bodies in two locations, the
UK and China. The NAC China fixtures and welding assembly equipment is of a
more recent construction and is consistently producing bodies of a greater quality
standard.
As our parent company’s President, Mr Chen Hong, publicised
in the Financial Times newspaper recently, we consider the quality of our vehicles
to be of the very highest priority.
What will become of the current Stadco workforce?
NAC is working very closely with Stadco to ensure minimum disruption
to the workforce. NAC recognises its corporate social responsibility and, although
it is not obliged to do so, will do its best to absorb certain Stadco team members
into its workforce.
Candidates would be selected on the basis of experience in relevant
trades including body quality, sheet metal work and logistics. We would also
look through the current vacancies and skill match where possible. NAC remains
committed to Longbridge and does not wish to lose any talented individuals it
can absorb.
Why will the situation not affect the TF launch?
NAC is confident that the current Body in White manufacturing capability,
quality and progress being achieved has secured a launch quantity sufficient
for a production start and continuation without a break in supply. In parallel,
our vehicle and engine test programmes are delivering very positive results.
What are the benefits to the consumer of moving the BIW
function to China?
We have great confidence in our facilities in China and our product
and having a single location for the component supply provides (us) with greater
influence and economies of scale coupled with the ability to test our first
product at the source of manufacture.
Does this mean that the bodies for all NAC/SAIC products
will be made in China?
No, only the small volumes of TF will resource its BIW from China
and this is a short term solution. The current plan allows for BIW to be carried
out in the UK
Is this the first step to seeing all production move to
China?
On the contrary, there will be investments into the Longbridge
site to produce state of the art European upper and lower medium vehicles.
What will be the environmental impact of sourcing car bodies
from China?
As stated above, we are talking about relatively low volumes for
the TF at this stage.
AROnline believes that the ending of the contractual relationship
between NAC MG and Stadco should be analysed in the wider context of a number
of other moves made by SAIC Motor Corporation Limited (SAIC Motor) as a consequence
of the merger with Nanjing Automobile Corporation (NAC).
The merger between SAIC Motor and NAC was finally completed on
the 8th April, 2008 but, in parallel with that, no doubt, complicated legal
process, SAIC Motor has undertaken a programme of commercial and legal corporate
housekeeping as demonstrated by, for example:
- the acquisition of the European IPRs to the MG brand for the
reported sum of €1.25m. which will now enable NAC MG to distribute MGs
in fifteen European countries, including Holland, Italy and Russia, and which
was, in all probability, an essential prerequisite for the recommencement of
production at Longbridge.
- yesterday’s announcement that SAIC Group’s Volkswagen
JV company, Shanghai Volkswagen Automotive Company Limited (SVW), will purchase
the former Fiat Group Automobiles S.p.A. and NAC JV plant at Nanjing in China’s
Jiangsu Province.
SAIC Motor’s President, Chen Hong, will be visiting NAC MG
at Longbridge on the 23rd and 24th April, 2008. A well-placed and informed source
has now told AROnline that “the future for Longbridge looks extremely
bright” and intimated that an announcement about SAIC Motor’s plans
for the MG marque and for Longbridge can be expected early next month. However,
in the meantime, AROnline reckons that a careful reading of NAC MG’s Fact
Sheet will provide readers with a clear hint as to the nature of those plans…
Back to top
News digest - extra
Compiled by CLIVE GOLDTHORP
1) SAIC Motor/MG and Roewe
Supplier pull-out fuels MG doubts – paper
Just-auto.com 16th April, 2008
The last car to be manufactured at the once-famous Austin, MG and
Rover plant at Longbridge may have already rolled off the production line, industry
insiders have told a key Birmingham newspaper. They told the Birmingham Post
the decision by main supplier Stadco to stop manufacturing body shells for the
MG TF sports car, as the paper had revealed on Saturday, could effectively sound
the "death knell" for the Nanjing project.
One influential source told the paper he doubted whether Nanjing
parent SAIC would ever produce cars at Longbridge. He reportedly said he rated
its chances of doing so as "very slim" although he did believe that
the former Rover factory could still have some role as a servicing centre. The
source, who has declined to be named, said a lot of money would have to be spent
to develop new versions of what was effectively an old model - the MGF.
The model was first launched back in 1995 and has had one major
facelift when it was renamed the TF. The source told the Birmingham Post there
were serious questions to be answered - could the TF sell in sufficient volume?
Could the group meet quality standards? Could they develop an engine? Could
they meet environmental requirements?
"It is a tall order," he reportedly cautioned. "It
is a huge task." He told the paper that far more attractive operations
had also struggled.
Jaguar had been "taken to the brink" before being acquired
by Indian conglomerate, Tata; Aston Martin was reliant on Qatari money and Russian
Nikolai Smolenski had baulked at producing TVRs at Blackpool. "If SAIC/Nanjing
thought they could produce cars at Longbridge economically, then I am sure they
would," he told the Birmingham Post.
"But can they do it economically? I cannot see them prepared
to spend the sorts of money required. It was always wishful thinking that something
would happen. I accept that some people within Nanjing had intentions to produce.
But I have never had the impression they were serious about it."
He told the paper Nanjing never had the capital to do it and SAIC
was pre-occupied with making the more recent merger of the two work. Nanjing
held a much-hyped 'start of production' ceremony at Longbridge last May but
really drove only a few pre-production cars from a silent factory. Few details
of when production really would start were forthcoming in subsequent months
before, or after, SAIC and Nanjing were merged in China.
"There is no emotional connection to Longbridge," the
insider told the Birmingham Post. "How would they compete? Who would buy
the cars? I don't think they will ever produce anything there," he added.
The paper said the claims were backed up by a second source who said the decision
by Stadco had effectively brought the curtain down on the Nanjing project.
Stadco, whose involvement with MGF/TF body shells can be traced
back to the original 1995 supply by Mayflower, reportedly cited uncertainty
over the delays as a reason for pulling out. It also has other fish to fry,
having recently set up a body-in-white joint venture in St Petersburg which
offers potential as the growing 'Detroit of Russia'. "There is a very real
fear now that they will just pull out altogether," the source told the
Birmingham Post.
"The best scenario for Longbridge would be for them to make
the panels in China and then send them to Birmingham. But why would they [do]
that - why not just assemble the cars in China?" The paper said UK suppliers
have been desperate for some clue as to what the Chinese might be planning but,
with no word coming out of SAIC, they remain in the dark.
Stadco was just one of about 150 companies supplying components
to the MG TF but, despite investing heavily in a new operation at Longbridge,
its patience eventually ran out, the report said. It announced on Friday it
was withdrawing from its contract to supply panels for what it called "commercial
reasons". The decision has put 30 jobs at risk, the Birmingham Post said.
However, SAIC/Nanjing is reportedly maintaining that its plans are on track.
"Initial volume production for the TF is insufficient for
Stadco to make a profit, making the venture uneconomical for them", NAC
MG admitted to Autocar. "NAC remains committed to the re-launch
of the MGTF and Longbridge. To date it has invested £38.4 million including
research and development in the project and is working to ensure that its products
are of the very highest quality. It is not thought that this current situation
will affect the TF launch."
The company claims that a brand new 'body in white' production
line has already been built in China and says that shells will be imported into
the UK when production of the TF starts, the report added. However, NAC insists
that body production will still take place in the UK once production volumes
are reached, even though it states that the Chinese body production is "consistently
producing bodies of a greater quality standard", the Autocar report
said.
2) China Watch
VW's China venture to acquire Fiat plant
Automotive News Europe 16th April, 2008.
The Shanghai car making venture owned by Volkswagen and SAIC Motor
has agreed to take over Fiat's former car making facility in east China, an
SAIC executive said today. Shanghai Volkswagen will buy the facility from SAIC,
which acquired it during last year's merger between SAIC and Nanjing Automobile,
a Chinese partner of Fiat, SAIC president Chen Hong told Reuters.
The facility has suspended production but will resume operating
in May, producing as many as 50,000 to 60,000 cars in 2008. Annual production
capacity will rise to 150,000 cars in the next few years, Chen said. He declined
to say how much Shanghai Volkswagen would pay to acquire the facility. The venture's
current annual capacity is 500,000 cars.
SAIC Motor, China's largest carmaker, is also investing heavily
to develop its own-brand cars. The own-brand car business generated 3 billion
yuan ($429 million) in sales in 2007, Chen said, out of the firm's overall sales
of 104.38 billion yuan. In early 2007, SAIC Motor rolled out its first own-brand
sedan, the Roewe 750, based on acquired technology. Later in the year, it merged
with smaller rival Nanjing Automobile, which had previously acquired failed
British carmaker MG Rover.
It aims to sell 16,000 MG cars this year, with sales of Roewe models
rising to 45,000 from 16,500 in 2007, Chen said. He added that he expects SAIC
to break even on its own-brand car business this year if it can reach its annual
sales target of 8 billion yuan. SAIC's 2007 net profit jumped 242 percent to
4.63 billion yuan, partly because of its purchase of major production assets
from its parent group in the previous year, including stakes in venture with
Volkswagen and one with General Motors.
Its profit last year was also boosted by 6.58 billion yuan of investment
earnings, up from 2.00 billion yuan a year earlier. Investment returns will
shrink this year because of the downturn in China's stock market, but SAIC aims
for this year's net profit to be at least as large as last year's, Chen said.
Back to top
News digest
Compiled by CLIVE GOLDTHORP
1) Jaguar and Land Rover
Jag-Land Rover dealers happy with Tata deal
John Revill, Automotive News Europe 14th April, 2008
Britishness of brands must be kept by new Indian owner
to help sell cars in the future
Most dealers across Europe are enthusiastic about the future for
Jaguar and Land Rover following the sale of the two brands to Tata Motors. "The
Indians have style and a quality of life, and that is what we need again for
Jaguar," said Manfred Hauswirth, chairman of the German Jaguar dealers
association and the owner of a dealership in Aachen.
Early customer reaction also has been positive, Luc Spiessens,
sales manager of Jaguar Antwerp in Belgium, told Automotive News Europe. "They
tend to make jokes [about the deal] after entering the showroom," Spiessens
said, "but during further conversations they see it as a positive and sensible
move." Ford Motor agreed to sell the British brands to the Indian automaker
last month for $2.3 billion (about €1.5bn).
The EU is carrying out a routine inquiry into the deal. The EU's
report is due by April 30. The sale is expected to be finalized in June.
All the dealers contacted by ANE agreed that retaining the Britishness
of the two brands will be key to their success. They said the takeover will
be viewed as a good thing as long as Tata keeps production in the UK, which
is the biggest market for both brands. Christoph Grün, a manager at Avalon
Premium Cars in Munich, said: "A lot of people think India is a Third World
country. So Tata should not take production of Jaguar or Land Rover away from
Britain."
One UK Jaguar dealer, who asked not to be named, thought Tata could
even speed up decision making, if it leaves that to UK-based management. Tata's
ownership also could help make Jaguar more popular with the UK's large Indian
community, the dealer added. More than 1 million people of Indian descent live
in the UK, according to British government statistics. In Germany, dealers believe
Jaguar and Land Rover could benefit from new investment from Tata to produce
the cars their customers want. Such models could include a cabriolet to compete
with the Mercedes-Benz SLK class and Porsche Boxster.
Said Christian Dünnes, a manager at Autosalon Dünnes
in Regensburg: "Our Jaguar customers have been asking for years for a small
convertible for less than €60,000 but nothing is in the pipeline."
Lingering doubts
Not all the dealers are totally happy with the sale to Tata. Thomas
Wagner, brand manager at Jaguar House in Bremen, said: "I would have preferred
to slip under the umbrella of a European carmaker. Tata is a famous name in
Asia, but not in Germany."
Wagner fears a movement of production to India, which he believes
would affect the quality of parts. Other dealers said that to succeed Tata would
need to:
-- Produce the right number of cars -- unlike Ford, which they
feel was guilty of overproduction.
-- Broaden the Jaguar range and speed up the life cycle of those cars.
-- Speed up the life cycle of Land Rover's models.
-- Resist building a two-wheel-drive Land Rover.
"We don't want" a 2wd Land Rover, said William Rees,
sales manager at Harwoods of Edenbridge in southern England. "Four-wheel
drive is our DNA, we have to maintain it."
Most Ford-bred executives will stay at JLR
John Revill and Mark Rechtin, Automotive News Europe
Most Jaguar and Land Rover executives are expected to stay in their
jobs when Tata Motors completes its deal to buy the British brands from Ford
Motor. "I think 99.9 percent of the people are going to want to stay on,"
said Ian Callum, Jaguar chief designer, who will stay. Tata Motors Chairman
Ratan Tata says the Indian company knows what it doesn't know. And it sure doesn't
know the luxury-vehicle market or the European and American markets.
Tata needs guidance, and that should be a great relief to the managers
at Jaguar and Land Rover. Both Ford and BMW moved in their own executives during
their ownership of the brands. But Tata likely will allow the existing executives
to stay on.
Transferring to Tata
These top Jaguar and Land Rover executives will retain their positions
-- Geoff Polites, Jaguar Land Rover CEO
-- Mike O'Driscoll, Jaguar managing director
-- Phil Popham, Land Rover managing director
Jaguar Land Rover CEO Geoff Polites, 60, will stay put. Polites,
an Australian, joined the two companies in September 2005 after a spell as vice
president sales and marketing at Ford of Europe. He has worked with Ford for
more than 30 years. Mike O'Driscoll, Jaguar managing director, and Phil Popham,
Land Rover managing director, will both remain in their posts, a spokesman for
the two brands said.
O'Driscoll is a native of Coventry, England, Jaguar's hometown.
He has spent most of his career with the British brand and took over from Bibiana
Boerio as managing director of Jaguar last year. Popham, who joined Land Rover
as a graduate trainee, became managing director of Land Rover in April 2006.
Jaguar Land Rover product development boss Al Kammerer will stay.
A Jaguar and Land Rover spokesman said that fewer than 50 people
at Jaguar and Land Rover from Ford will have the option to stay with the US
carmaker. He said: "Tata has made it clear the way they work, they like
to go into companies, retain the managers and let them run the business."
2) China Watch
China show highlights clean cars
Alysha Webb, Automotive News Europe 14th April, 2008
Fuel-efficient technologies debut alongside German SUVs
at Beijing auto show
European, US and Chinese automakers will show off fuel-saving powertrains
and cars designed for China at the Beijing auto show April 20-28. Mercedes-Benz
and Audi also will give world debuts to their new medium-sized premium SUVs.
Audi will unveil its Q5 SUV in Beijing because it sees China as a key growth
market. Last year, China became Audi's second-biggest market after Germany as
sales grew 24.8 percent to 101,996 units.
Like Audi, Mercedes wants to take advantage of the growing popularity
of SUVs in China. After showing concepts for its new GLK class at the Geneva
and Detroit auto shows this year, Mercedes will unveil the production version
in Beijing. Audi parent Volkswagen group will debut two models developed for
the local market by its joint ventures in China. One will be a family-sized
sedan code-named the Model X, based on the Jetta/Bora. The other will be a more
upscale sedan called the Lavida that eventually will replace the Santana.
Both cars are based on the fourth-generation Golf platform and
will go into production in the summer. The Model X will be made by FAW-Volkswagen
Automotive and the Lavida by Shanghai-Volkswagen Automotive. VW's display also
will include models with common-rail diesel and compressed natural gas engines.
BMW also will hint at future China-made models. It is showing its
1-series entry-premium car, along with other cars available in China only as
imports, such as the MINI Clubman.
Cars to see
Audi, Mercedes and VW will launch key vehicles in China
Audi: Q5
Mercedes: GLK
Volkswagen: Two China-only cars
3) India Watch
Tata Nano changes low-cost development
Jesse Snyder
Since the debut of Renault’s Dacia Logan, many automakers
have changed their methods for developing ultralow-cost cars. The strategy used
to be stripping features and manufacturing costs from previous-generation products.
Now the automakers are taking a clean-sheet approach.
The Tata Nano, shown, isn't even on sale yet, but the £1250
Indian car already has changed the rules on how to develop low-cost vehicles.
The car was unveiled here in January. Interest remained frenetic during a subsequent
media event at the Geneva auto show. Ahead of the unveiling, scoffers had predicted
a car with no doors or a glorified pedicab. The substantial actual vehicle has
global automakers changing their approach to developing low-cost vehicles, say
suppliers and consultants.
"The Japanese, Koreans and Europeans were all approaching
emerging markets by taking content out of existing cars," said Nigel Griffiths,
director of international automotive research for Global Insight in London.
"The Renault Logan showed them a unique design is possible, and the Tata
Nano showed them how far that could go."
Clean-sheet approach
Global automakers known to be developing an ultralow-cost car include
Toyota, General Motors, Fiat, Suzuki, Renault and Nissan. All are taking a clean-sheet
approach, suppliers say. Since Renault's Dacia Logan debuted in 2004, many automakers
stopped trying to appeal to price-sensitive markets by stripping features and
manufacturing cost out of previous-generation products.
"The Nano and the Logan are clearly not decontented programs,"
said Richard Buitendijk, a U.K.-based supplier analyst for CSM Worldwide. Drawing
from those examples, other automakers' new programs for low-cost vehicles are
"taking a clean-sheet approach," Buitendijk said. "Vertically
integrated suppliers with a global presence see a real opportunity for sourcing
in low-cost countries."
The incentive for manufacturers is clear: growth in a new segment.
By 2020, the global market for vehicles priced below $5,000 will explode to
15.7 million units annually, or about the size of the US new-vehicle market,
from just 1.9 million this year, predicts the consulting firm A.T. Kearney.
Tata Motors forecasts initial volume of 250,000 Nanos a year. But it is telling
its suppliers to prepare for an eventual 1 million units annually, including
500,000 units assembled in markets that could include northern Africa, Southeast
Asia and South America.
Nano guides
Tata Motors' development program for the Nano used a highly focused
process with several unconventional philosophies. Here is a sampling of the
development team's guiding principles.
Reject all assumptions. Instead of imagining a cheaper version
of existing cars, developers asked what would be better than a motorcycle.
Design for India, prepare for the world. Many suppliers got deals
for both base and upgraded parts.
Simplify, redesign. Robert Bosch redesigned mature technologies
into new products that are lighter and less complex. For example, its 35-amp
generator weighs 11 pounds, 2 pounds less than a standard 40-amp one. It costs
less, too, because Bosch used an external cooling fan.
Use less. By limiting the Nano's weight to 1,279 pounds, the engine
needs only 2 cylinders instead of 3 or 4. It has 1 windshield wiper instead
of 2. Tiny 65R12 tires and wheels use less material and need only 3 lug nuts
instead of 4 or 5.
Maximize low-wage sourcing. About 97 percent of parts are built
in India. Costs are lower because of low local wages. The shorter supply chain
cuts inventory and safety stocks.
Enlist government help. India's West Bengal regional government
streamlined the construction for the Singur plant near Calcutta and leased the
site to Tata for free.
Motivate suppliers. Tata appealed to Indian national pride to
enlist native suppliers early. Said Deep Anand, chairman of supplier Anand Automotive:
"You don't say no to Mr. (Ratan) Tata."
Simplify
Other manufacturers are studying and adapting the same approach
that Tata Motors took to develop the Nano. Instead of decontenting, their programs
for ultralow-cost cars slash costs by simplifying the product and manufacturing.
But different companies' development processes are not identical because each
automaker has different needs, said Richard Butler, CEO of Caparo Vehicle Products
in Birmingham, England.
Caparo makes much of the underbody and internal structural stampings
for the Nano and is working with an unidentified European automaker on an ultralow-cost
car. "Tata's focus was on reducing weight and cost," Butler told Automotive
News. The approach of the other program is different, he said. "Cost comes
in, but cutting weight and CO2 reduction come in more."
Tata involved more than 100 suppliers early in the process and
worked closely with them to coordinate their efforts, said Girish Wagh, head
of the Nano project for Tata. Robert Bosch GmbH won several Nano contracts through
its local subsidiaries and joint ventures in India. For four years, Bosch has
worked on revamping existing products and technology for emerging markets by
eliminating unneeded complexity and sourcing parts in low-cost countries, said
Ninan Philip, deputy general manager of marketing for Bosch Mico Motor Industries
Co. in Bangalore.
For example, Bosch's generator for the Nano is 35 amps and weighs
11 pounds, instead of the normal 40-amp, 13-pound model. "We reduced the
cost with an external cooling fan," Philip said. For the Tata Nano, Robert
Bosch developed a 35-amp generator that weighs 11 pounds, instead of the normal
40-amp, 13-pound unit.
Removed 700 functions
Bosch adapted a motorcycle starter motor for the Nano, saving more
weight, said Sanjay Khatri, a Bosch senior sales manager. Bosch removed 700
of the 1,000 functions of its European-market engine control module. It also
shrank the electronic chip and its housing. In addition, Bosch redesigned sensors
to reduce size and weight by grams.
Delphi won the contract for the Nano instrument cluster by designing
one that only included the basic instruments in a package that weighed 14 ounces,
far less than the 2 pounds and 3 ounces normal in North America or Europe, said
Ashok Ramaswamy, president of Delphi India. "We had to rethink our development
process, to just put in the functions asked for," he said. "We minimized
components, used local supply base options, minimized the whole value stream
and the manufacturing process."
Better manufacturing
Automakers are asking their suppliers to reduce manufacturing costs,
in addition to trimming weight. Suppliers and automakers are seeking ways to
reduce the amount of work done on each part and to simplify the process, right
down to fewer welds and alternative ways of putting together subassemblies.
"With the Nano, the vast majority of savings in the body-in-white is through
different means of joining panels and assembling," Caparo's Butler said.
"Most of the savings in (stamped) doors is in the assembly jigs and fixtures.
Tata says, 'Let's look at this panel and assembly' and reduce the add-on work
while retaining safety and integrity."
Butler would not discuss specific Tata production cost-cutting
methods, but he agreed the approach was not unlike methods used at the Dacia
Logan factory in Pitesti, Romania. For example, Dacia did not automate the process
where the top, bottom and sides of the body are welded together. Instead of
several robot welders, Dacia workers hand-clamp the pieces and manually weld
them.
Rejecting robots
Although that replaces expensive robots with low-wage workers,
it raises the risk of bad welds. To prevent glitches, the assembly jig of tubular
steel has channels to guide hand welders modified with elongated tips, so that
each manual weld is both aligned perpendicular to the metal for a strong weld
and precisely positioned in the right spot.
Delphi modified its production process to reduce capital investment
for the Nano instrument cluster, said Douglas Brandt, Asia-Pacific managing
director for body security and displays in Shanghai. "When we add a pointer
on an instrument in North America, we use a robot," he said. "Here
we designed a process so we could do it manually with precision. We looked for
simple ways to do it with less capital intensity." Tata's effort is so
specifically aimed at India that the Nano is not suited for developed-world
markets, suppliers say.
Lower maximum speeds in India, for example, mean the Nano can use
a simpler powertrain and a less sophisticated suspension than vehicles built
for America or Europe.
Tata factors
Tata has some advantages others would find hard to duplicate: the
national pride of Indian suppliers, a virtually untapped vehicle segment priced
below £2500 and the lightweight-construction expertise of Indian motorcycle
suppliers. But Tata has a disadvantage, too. As a relatively new automaker,
it has little "old technology" in the form of functional but fully
amortized products and components.
Renault's Dacia Logan was designed from scratch, but it depends
heavily on mature existing technology, including a 12-year-old engine and transmission
and previous-generation airbags. A 2007 Deutsche Bank analysis shows the manufacturing
costs of the Logan are 62 percent lower than for a Renault Megane, with a quarter
of that savings coming from using the older powertrain.
The Nano development program was also tailored to meet unique Tata
Motors needs. Tata wants to break out of India and compete globally, so it must
have access to international suppliers and their technology. The car is 97 percent
India-sourced, but most of those parts come from either Indian-based subsidiaries
of international suppliers or joint ventures. In addition, Tata's key contracts
require suppliers to locate next to any future Tata plant in markets outside
India.
Nano upgrades
Tata plans to scale up from the basic Nano into the virtually empty
pricing space between £1250 and £3500, so the car is deliberately
designed to be upgraded with higher-priced equipment. Tata worked to reduce
the cost of every Nano part but took the life-cycle cost into account, Tata's
Wagh said. That sometimes meant increasing per-part costs on the basic model,
he said.
"We designed the front-door steel for the stress of a manual
window lifter," he said. "But we knew we would add a power lifter
later, and it puts the stress in a different place. So we ended up with a door
that can handle both."
Suppliers are eager to prove themselves.
Caparo's Butler said being known as Tata Motors' body-in-white
partner establishes his company's credentials as an ultralow-cost supplier.
Similarly, German's Continental sees its Nano contract as a modest but profitable
start in the low-cost sector. "We don't earn much money with it, but we
would never do a project just to make an investment in the future," said
William Kozyra, Continental's North American CEO.
Single sources
But in return for suppliers' commitments, Tata is willing to make
concessions. Three-fourths of the car's parts are single-sourced. Suppliers
are getting long-term contracts and deals to provide upgraded parts later if
they develop simple parts now. For example, Shavani Locks in Faridabad, India,
will supply the manual window lifters for the Nano.
"But we are already developing the electric window lifts for
the upgraded Nano," said AK Gupta, Shavani's deputy general manager for
marketing. "We don't make a lot on the manual lifters, but we will do well
on the upgrades. And the program is for a million."
Back to top
MG: any closer to that promised revival?
Riley's XPower WR... (Picture: Andrew Elphick)
KEITH ADAMS
The XPower SV supercar’s come back? Why?
In the latest twist of the MG Rover saga, and three years after
the original MG XPower SV supercar went out of production, the controversial
car has made a surprise re-appearance – and without any help from the
Chinese.
Now known as the XPower WR, the controversial supercar has been
eased back into production by William Riley – a descendant of the creators
of the historic car company bearing the same name.
His company, known as MG Sports and Racing Europe Limited, produces
the supercharged WR, selling it for between £75,000 and £90,000
depending in specification. The rights to the car – and its badge –
were bought from MG Rover administrators PricewaterhouseCoopers in 2005. Riley
claims that the seven examples of the new car have been sold, following its
unveiling at the International Classic Car Show at the NEC last autumn.
How many will they build, and what’s the real story?
The founder of MG Sports and Racing Europe Limited told AROnline
that he plans to expand his operation ambitiously to produce between 1500-1800
cars per year, and denies claims that his company is merely assembling partially
completed SVs, readied for production in 2005.
Riley claims that his WR is rather special. ‘This is the
CS version, 150kg lighter than the standard car.’ A lowered compression
ratio and increased supercharger boost, results in nearly 600bhp. Riley intends
to enter the CS in the Shelsley Walsh hill climb in May.
However, according to one Longbridge insider, talk of series production
is premature. The WR is yet to be Type Approved, and our source tells us that
Riley is trying to sell his new car using the old documentation from the MG
Rover era – and although new approval can be obtained, it’s an expensive
and time-consuming process. He added that Riley has been banned from ever setting
foot into Longbridge – and that the relationship between him and the Chinese
has broken down.
And where does that leave plans for the TF roadster?
The production status of the WR might be questionable right now,
but at least it’s out there – something that can’t be said
about the reinvigorated TF roadster, first shown to the press in April 2007.
Development work continues, although there are issues hindering the introduction
of the Longbridge built car.
However, quality’s not one of them. The NAC produced car
is more tightly screwed together than those built by MG Rover – a situation
that needed to happen. The real reason for the fail to launch appears to be
regarding production volumes and the future plans for the popular roadster –
with NAC and SAIC disagreeing over how it should proceed.
Many at NAC want to introduce the vehicle now, proving the company’s
commitment to Longbridge, but SAIC want to produce a new roadster from scratch.
However, given that time’s slipping, and MG’s name falls further
in the mists of time, action needs to take place sooner rather than later –
and that the final outcome will probably be that the TF will be built in limited
numbers, a holding pattern until real resources can be put into MG’s relaunch
with new products.
Given that StadCo will no longer produce MG TF bodyshells in partnership
with NAC at Longbridge, the question may well already be answered. Being the
dominant partner in the relationship, SAIC could well be imposing Chinese built
bodyshells on Longbridge in lieu of future developments for the factory.
Either way, it seems like there are more questions now, than there
were back in 2005.
Back to top
News digest
Compiled by CLIVE GOLDTHORP
1) SAIC Motor/MG and Roewe.
Reassurances needed on Nanjing's and Shanghai's intentions
at Longbridge
David Bailey, Birmingham Post 10th April, 2008
Does StadCo's pull out of Longbridge affect the production of new MG TFs?
News today that that StadCo will no longer produce MGTF bodyshells
at Longbridge for Nanjing raises some urgent questions as to Nanjing's intentions
at the site. In particular, is MGTF production still going ahead?
StadCo and Nanjing said simply that "Stadco and NAC jointly
confirm that for commercial reasons, production of bodyshells for the MGTF by
Stadco will cease. Both parties are working to ensure minimum disruption to
the workforce." They added that "consultations with elected employee
representatives will commence immediately and every effort will be made to assist
those affected by this announcement".
Until today, StadCo had been seen as a key partner for Nanjing
in its efforts to restart small scale MGTF production at Longbridge, and had
shifted body-shell production there from its site in Coventry (StadCo had always
made the body shells for the MGTF, back under MG Rover days).
Quite where this leaves MGTF production is the big question.
Nanjing's efforts to restart MGTF production at Longbridge had
already been delayed, apparently beset by concerns over quality. Whilst Nanjing
are good at lift-and-shift operations (witness the speed at which they shifted
production lines out to China), actually making quality cars has proved to be
more difficult for them. While Nanjing beat Shanghai in the bidding for MG Rover's
assets back in 2005, many commentators noted then that actually it is a small
firm and never really had the resources to invest in the brand and to develop
new models. Its joint venture in China with Fiat has not gone well and the firm
has never successfully developed a new model and brought it to market. Perhaps
not surprisngly then, progress at Longbridge since 2005 has been painfully slow.
Indeed, it was with some relief that Shanghai Auto purchased Nanjing's
car operations at the end of 2007. This was in part prompted by the Chinese
government rightly banging heads together to make a go of the MG brand and to
consolidate a fragmented industry in China. Shanghai was always the better bet
for reviving MG given its size and ability to generate cash, as the unions here
rightly pointed out back in 2005.
So, at the start of this year, things looked more positive for
an MG revival at Longbridge. Shanghai was the firm which should have taken over
MG in the first place. Hopes were also raised because after Shanghai bought
MG Rover's intellectual property rights in late 2004, it continued to develop
the replacement for the R45 through its joint venture with Ricardo here in the
West Midlands. This is now well advanced and there are hopes that an MG-badged
version could be produced both in China and at Longbridge.
So the decision today raises a number of serious questions. Is
this part of Shanghai asserting control and maybe bringing in complete knock-down
MGTF kits from China including body shells? If so, there will be fewer jobs
here in the UK than we thought.
Or is MGTF production still going ahead at all? Indeed, what exactly
is Nanjing and Shanghai now planning for their operations at Longbridge?
Some answers would be very welcome, especially when Nanjing's plant
still forms such a large part of the old Longbridge site which needs to be redeveloped
to create much-needed local jobs.
SAIC-Nanjing acquires European rights to MG name
Motor Authority 8th April, 2008
Chinese automaker Nanjing purchased much of the MG brand while
then-rival SAIC took ownership of other names under the MG umbrella, including
several Rover models. Not included in either deal, however, were rights to distribute
under the MG trademark in Europe. That has been rectified, however, for a mere
€1.25 million.
The acquisition of trademark rights in the MG name means SAIC-Nanjing
can legally distribute MG cars in fifteen countries, including Russia, Italy
and the Netherlands, reports AutoTelegraaf. The purchase of the name rights
should see production at Britain’s Longbridge plant ramping up soon. Late
last year SAIC and Nanjing announced their merger, and prospects of real progress
on a return of European MG production and sales was looking bright. But the
stumbling blocks of quality control and legal technicalities like the trademark
rights held things up. Now that the marque can use the mark freely in Europe,
SAIC-Nanjing is a step closer to realizing production.
SAIC independently produced cars under the Roewe brand for the
Chinese market prior to the merger. Likewise, Nanjing had built some MG ZT and
ZF models in China, although sales were slow due to a lack of brand awareness.
2) Jaguar/Land Rover
Tata picks up Daimler and Lanchester brands
John Cranage, Automotive Correspondent, Birmingham Post 4th April, 2008
Tata Motors of India has acquired more than just Jaguar and Land
Rover under its £1.15bn deal with Ford. It also now owns two of the most
famous names in British motoring history – Daimler and Lanchester, both
owned by Jaguar.
Both
were born in Coventry in the heady early years of the city's car industry boom
and both made automobiles for the upper crust carriage trade. Indeed Daimler,
whose name is still alive (just) thanks Jaguar's persistence in building a high
end Daimler-badged variant of the flagship XJ luxury saloon, complete with the
famous fluted radiator grille, was once the limousine of choice of the British
Royal Family.
Lanchester disappeared a long time ago but memories linger of its
stylish, well-engineered cars. Lanchester was the first four-wheeled petrol-engined
car to appear on the roads of Britain. It and Daimler grew out of a failed attempt
by Victorian entrepreneur Harry Lawson's attempt in 1896 to use the engineering
skill in Coventry to convert the city's manufacturers from bicycles to cars.
He
also did his best to make sure he had a monopoly on the burgeoning horseless
carriage industry. Lawson leased part of a factory owned by the Coventry Cotton
Spinning and Weaving Company in Drapers Fields as the HQ of what he called The
Great Horseless Carriage Co. Ltd. That was short lived but out of it, in 1898,
grew the Motor Manufacturing Company and out of that came Daimler and Lanchester.
Automotive historian Brian Long, in his 1990 book The Marques of
Coventry explains how Lanchester grew out of the Daimler enterprise to become
an independent carmaker before the two were reamalgamated in 1931. Common to
both was Dr Frederick W Lanchester, described by Long as this extraordinary
engineer, who was initially consulting engineer to Daimler. He had his first
car on the road in 1895 – albeit illegally – and went on via Daimler
to form the Lanchester business.
"The vehicles incorporated many novel features, a lot of them
years ahead of their time," writes Long. "By 1899 the Lanchester Engine
Co had been founded in Birmingham, and just two years later the first of the
Lanchester cars were being sold." Dr Lanchester resigned in 1909 to work
as a consultant while his brother, George, went on develop engineering innovations
– among them the fluid flywheel, an early form of automatic gearbox –
for Lanchester and Daimler.
The last car to be badged as a Lanchester was the 1954 Sprite and
Jaguar acquired the rights to the name when it bought Daimler, with its factory
at Radford, from, Birmingham Small Arms (BSA) for £3.4 million in 1960.
Ironically, Ford once approached Jaguar with a proposal to build Jaguars in
Germany and call them Lanchesters. Ford went on to buy Jaguar in 1989.
Daimler, which according to Long "can justly claim to have
been the first company in England set up for the sole purpose of manufacturing
petrol-driven motor vehicles on a large scale", owed its origins to a deal
struck between the German engineer Gottlieb Daimler and young British mechanical
engineer F R Simms. In the late 1890s Simms attended a exhibition in Bremen
where he saw a single vertical cylinder internal combustion developed by Daimler
and his partner William Maybach.
By 1893 Simms had acquired the UK patent rights for the Daimler
engine and had founded the Daimler Motor Syndicate. Long says: "The obvious
location for the development of the company was Coventry, because Simms knew
mechanical skills and inventiveness abounded. When the Prince of Wales [later
Edward VII] bought a Coventry-built Daimler in 1900, this gave the industry
a much-needed boost, as well as a large gain in respectability."
Daimler achieved the height of respectability, exemplified by the
stately Double-Six built for Queen Mary in 1935. That was tarnished after Chairman
Sir Bernard Docker and his flamboyant wife pushed the company into producing
a number of "outrageously finished Docker Daimlers" in the 1950s.
By the end of the '50s the company was in financial difficulties and Sir Bernard
was forced out amid allegations of extravagance and mismanagement.
The final real Daimlers were the Majestic and the SP250 sports
car known as the Daimler Dart. Since the 1960s Jaguar has produced Daimler variants
of its big saloons but there was a seven-year gap before the name reappeared
in the form of the Super Eight in 2006. With a showroom price in excess of £80,000,
the Super Eight is built only in very small numbers for, as one motoring writer
said, traditionalists who still call the radio "the wireless". So
far this year, Jaguar has sold 13.
Journalist Mark Bursa speculated on whether Tata will attempt to
recoup some of the £1.15 billion it is paying for Jaguar and Land Rover
by selling Daimler back to Daimler of Germany, which is currently allowed to
use it only in conjunction with something else, i.e. Daimler Benz. "On
the other hand, Tata might see potential to turn Daimler into a super-luxury
brand to challenge Rolls-Royce and, in a supreme irony, Daimler AG's Maybach
– especially in Asia," Bursa wrote.
At the time the Super Eight was unveiled, a Jaguar executive said:
"Just as in Great Britain, royal families and political dignitaries in
the Far East traditionally used Daimlers and we expect this new model to appeal
to them in much the same way. "We know there is latent demand and will
sell them on an individual basis to enthusiasts looking for renowned British
engineering and craftsmanship tailored to a name as distinguished as our customer
base."
It seems that, even before Tata's deal with Ford is finalised,
that the Daimler name will motor on. But Lanchester? Some enthusiasts might
dream of a revival of the brand. But remember, BMW's Bernd Pischetsrieder said
back in 1994 when the company bought Rover Group that he dreamt of reviving
nameplates such as Riley and Triumph.
Needless to say, that didn't happen.
S&P cuts its rating for Tata Motors
Joe Leahy in Mumbai, Financial Times 7th April, 2008
Tata Motors' £1.15bn debt-funded deal for Jaguar and Land
RoverFord has led Standard & Poor's to cut its credit ratings because of
concerns about growing indebtedness. The agency left the Indian group on credit
watch after cutting its already noninvestment grade ratings a notch to "BB"
from "BB+".
Shares in Tata Motors have fallen 23 per cent since it was confirmed
as the frontrunner in the race for the Ford luxury marques in early January.
The stock ended Friday down a further 2.39 per cent at Rs613.65. Investors are
balking at the additional debt required and challenges that Tata Motors faces
turning round lossmaking Jaguar and managing the profitable but high-end Land
Rover brand.
Proponents of the deal counter that the takeover gives Tata Motors,
which is at present mostly a domestic operator and little known outside its
home market, exposure to advanced technology, and to branding and distribution
in developed markets. The company is planning to take out a £1.5bn bridge
loan to finance the deal and intends to raise an additional $1bn in new equity
and sell assets as part of a refinancing package. Anshukant Taneja, credit analyst
at Standard & Poor's, said: "The rating action reflects Tata Motors'
heightened financial leverage, resulting from the $3bn bridge loan mobilised
to fund this transaction."
The ratings downgrade reflected worries that business conditions
were turning against Tata Motors, the agency added. "It also reflects a
more challenging business environment, both for the company's domestic passenger
and commercial vehicle segments in India and for the high-end luxury car segments
in the key markets for Jaguar and Land Rover," Mr Taneja said.
Tata Motors benefited from its parentage as a member of one of
India's biggest private sector conglomerates. The profits and cash flow of Jaguar
and Land Rover had also recently improved, he said. But there was also concern
that Tata Motors was pushing ahead with aggressive domestic investment plans.
"This could result in still higher leverage and a potentially
protracted improvement in its credit metrics," Mr Taneja said.
3) MINI.
MINI crossman is coming
Auto Express 9th April, 2008
Text: Sam Hardy / Photos: Radovan Varicak/Motor Forecast
The MINI is toughening up – with this new 4x4 model, on sale
next year. Sitting above the Clubman estate variant, it will further develop
the MINI line-up, and compete with other lifestyle SUVs such as the Ford Kuga.
The model will also rival forthcoming prestige brand 4x4s like
the BMW X1, with which it shares underpinnings. Bosses haven’t decided
on a name yet, but Auto Express has learned that Crossman is leading the charge
as the favoured badge at this stage. As you can see from our pictures –
produced using inside information – the MINI SUV takes the look that was
debuted by the Clubman and adds a bit more muscle. It features extra body cladding
and a raised ride height to provide a more beefy stance and a chunky shape.
Details such as the roof rails and side rubbing strips complete the look.
Yet with its bold circular headlights, oversized grille and trademark
clamshell bonnet, the newcomer still has the cheeky appearance of the hatch.
And that’s vital – owner BMW didn’t want too aggressive a
design that would tread on the toes of the X1, or alienate the legions of buyers
who are loyal to the MINI brand.
While the styling is clearly inspired by the Clubman, the 4x4 has
a more conventional layout – there are two proper rear passenger doors,
instead of the single ‘Clubdoor’ that features on the estate. These
combine with the distinctive twin van-style openings on the tailgate –
also seen on the Clubman – to ensure the off-road MINI is the most practical
car in the range.
As it sits on a stretched version of the standard load-lugger’s
platform, the SUV will offer more space inside. That means there will be adequate
room in the back for two adults – although thanks to those rear doors,
access should be much better. The dashboard and all other interior detailing
will be carried over from the Clubman. But the question on the lips of all MINI
fans is: will the latest MINI be a proper off-roader, like the Land Rover Freelander?
Not really. The SUV will be biased towards on-road use, and won’t
sacrifice the agile, driver-pleasing handling for which MINI has become famous.
Nevertheless, there will be a full-time four-wheel-drive system, said to have
been developed by transmission expert Getrag. Add in the raised ride height,
and the car will be reasonably capable over rough terrain – easily rugged
enough for most buyers.
Top brass are conscious they are introducing an SUV at a time of
feverish environmental awareness, so they will make the model the cleanest and
most frugal fuel-wise in its class. As a result, every variant will benefit
from the Efficient Dynamics tweaks seen elsewhere in the range, with a stop-start
system cutting the engine when the car comes to a standstill and a clever alternator
control which only charges the battery when needed.
The engine line-up will be carried over from the Clubman, although
an entry-level One model isn’t likely to be offered. That means buyers
will be able to choose from the 118bhp 1.6-litre Cooper, the 109bhp 1.6-litre
diesel Cooper D and the flagship 173bhp 1.6-litre Cooper S. A six-speed manual
transmission will be standard, with an automatic box on the options list.
Testing of the SUV is well underway – as revealed by our
spy shots. But fans will have to be patient, as it will be some time before
the final showroom model is ready. As it did with the Clubman, MINI will preview
the car with a series of concepts, and the first is expected to be displayed
at a major motor show later this year. Production will start shortly afterwards
– the off-roader is being assembled at the Magna Steyr plant in Austria
because MINI’s factory in Oxford is already at peak capacity – and
the car will arrive in dealers here towards the end of 2009.
There’s no official word on prices yet, but with the Clubman
starting at £14,235, entry-level models are likely to kick off at around
£15,500.
4) China Watch
Auto consolidation running smoothly
Jin Jing, Shanghai Daily 4th April, 2008
THE Shanghai Automotive Industry Corp, which has acquired the smaller
domestic rival Nanjing Auto, said consolidation has been going smoothly and
fruitfully and has revealed a series of blueprints on its management team, products
and manufacturing capacity. SAIC has appointed four high-profile officials including
Chen Zhixin, the executive vice president, to lead the restructuring, the company
said in a statement yesterday.
The move came three months after the nation's largest car maker
signed an agreement to acquire Nanjing Auto in the biggest merger and acquisition
deal in China's car industry history as the government urged the country's carmakers
to consolidate. The consolidation also included product development and the
sharing of resources in engineering ability and manufacturing facilities, part
of its 8.5 billion yuan (£600m) investment to integrate and further develop
Nanjing Auto.
SAIC said Nanjing Auto will be able to boost its annual production
to 500,000 units by 2012 with its overall plant coverage trebled by 2010. The
newly established Donghua Co Ltd, which grouped the auto parts and trade assets
from SAIC and Nanjing Auto, has also targeted a sales revenue of 15 billion
yuan within five years.
Nanjing Auto's MG-branded vehicles will be designed to meet the
increased market demand for cars with sporty features, with future model development
to be guided by SAIC, the company added. The move will help SAIC to resolve
the overlap of product line-up between its self-owned Roewe and Nanjing Auto's
MG models, which were both developed from the models from the bankrupt British
car maker MG Rover, analysts noted.
MG7 sedans
Nanjing Auto will launch the new MG7 sedans, equipped with SAIC's
own 1.8-liter engine, this year as well as the MG3 sports car. In the commercial
car vehicle field, Nanjing Auto will continue to introduce new models this year
after joining with SAIC in the research and development sector, starting with
the Yuejin Ouka in this coming year.
A former production facility of Nanjing Auto's venture with Fiat
S.p.A will produce cars for Shanghai Volkswagen, the joint venture between SAIC
and Volkswagen. The Chinese partner of Volkswagen AG and General Motors Corp,
aims at selling at least 1.9 million cars this year.
5) The Demise Of MG Rover Group Limited
We deserve answers on Longbridge failure – MP
Duncan Tift, Business Staff, Birmingham Post 7th April, 2008
Almost all of the 6000 former car workers who lost their jobs when
Longbridge collapsed have found re-employment - but three years from the crash
they are no closer to finding out the official reason for the factory's closure.
A long-awaited report commissioned by the Government into the events at MG Rover
remains unpublished and, according to Richard Burden MP (Lab: Northfield), until
it is no one will "achieve closure on the closure".
Latest requests to the Department for Business, Enterprise and
Regulatory Reform - which took over responsibility for the report from the now-defunct
Department for Trade and Industry - for the report's publication date are batted
off with the response: "We have no date yet. We want an accurate and thorough
investigation that gives all the answers."
However, Mr Burden said this simply wasn't good enough and the
ex-employees, their families, the Longbridge community and Birmingham as a whole
deserved answers. "It is beyond a joke," he said. "I simply don't
understand why it is taking so long to produce the report and until it is published
then we shall never achieve closure on the closure."
Latest figures have shown that the independent report has so far
cost around £11 million and in the process of their deliberations inspectors
have run up almost £100,000 in hotel bills and £30,000 on food bills.
The Commons Public Accounts Committee has estimated that the total cost of MG
Rover's collapse to taxpayers, creditors and former employees was almost £1
billion.
This included more than £600 million owed to employees and
unpaid creditors, and costs of £270 million to the taxpayer. The four
members of the Phoenix consortium - John Towers, Peter Beale, John Edwards and
Nick Stephenson - that rescued Rover when BMW pulled out are currently managing
assets that will ultimately be sold and the proceeds placed in a trust fund
set up to benefit redundant Longbridge workers and their families.
However, they have said they are not in a position to do anything
until the report is published. A clearly exasperated Mr Burden added: "If
that is the case, then it is just further justification for the report to be
published as quickly as possible." He said that the Phoenix consortium
had a vested interest in seeing closure because if they failed to provide any
money for former workers then that was likely to be their legacy - not the fact
that they saved Rover when no one else would.
Mr Burden said he also hoped that the assets being managed by PricewaterhouseCooper
would be declared shortly in the hope that ex-employees would get something
back. Figures released today by the Rover Task Force show that of the original
6,346 who made claims for Jobseeker's allowance, 5979 are no longer claiming
Working Age Benefits - this equates to 94.2 per cent.
Of the 5,979, 5,801 are known to be working and 139 are registered
for Jobseeker's Allowance. David Cragg, regional director of the Learning and
Skills Council in the West Midlands, said: "The closure of MG Rover was
a devastating blow for the local community - unprecedented in its scale. "Now,
three years down the line, the fact that the vast majority of ex-MG Rover workers
are back in employment is testament to that commitment to our core objective
- delivering the right skills that will meet employers' needs and creating opportunities
for individuals."
He said the challenge going forward was to make sure that everyone
continued to build on the work that had been done so far, not only in Longbridge
but in disadvantaged communities throughout the region. However, while the majority
of workers have found alternative employment, very few of them are actually
employed making cars.
Hopes were high last year that Shanghai Automotive, which took
on the MG brand from Nanjing, would soon begin producing sports cars from their
base at Longbridge. Around 50 dealers across the UK had been told that the MG
TF would be launched in September and had confidently expected to see it in
showrooms by now. But quality issues with the Chinese-made components have caused
further delays and now no one is sure when production might recommence.
Suggestions were that SAIC were eyeing developments at nearby Jaguar
and Land Rover to see what might happen there. It was hoped they would see the
advantages of having a British design and manufacturing facility at Longbridge
that could be the base for a European subsidiary operation. However, so far
nothing has happened and no one from the company has been available for comment.
The old Rover 75, now renamed the Roewe 750, is enjoying a new
lease in China, winning a host of consumer awards including The Most Satisfactory
Self-owned Brand Award and The Most Satisfactory Product Design Award.
6) The Future Of Britain’s Automotive Industry
The Big Question: As Jaguar/Land Rover is bought by Tata,
is the UK car industry finished?
Sean O'Grady, Economics Editor, The Independent 27th March, 2008
Why are we asking this now?
Because the US motor giant Ford has just sold two of the proudest
names in the British car industry – Jaguar and Land Rover – to Tata
of India. Some 16,000 jobs are at stake. Given India's relatively low cost base
and rapidly expanding market for vehicles, there is naturally some concern about
the future of the marques. The worry is that Tata could do what the Chinese
car companies Shanghai Automotive and Nanjing did to MG Rover and simply seize
control of the intellectual rights to the designs and brands and move production
eastwards. An Indian rather than a Chinese take-away, perhaps. However, that
is a worst-case scenario – the future could be a lot brighter.
Do we still make cars in Britain?
Yes, lots. Production last year was just over 1.5 million, just
off its recent high of 1.6 million and below the all-time peak of almost 2 million
reached in 1972, but still way up on the dark days of the late 1970s and early
1980s. British cars are now better value and sell more abroad.
What will happen to Jaguar/Land Rover?
In the short-term, very little. Production will continue and Ford
will continue to supply engines and other components to the companies. In the
medium-term, the chances are that production of the more basic Land Rover models
will migrate to India. The principal candidate for relocation would be Land
Rover's Defender – beloved of the British Army. The potential for this
vehicle in emerging markets is huge. However, that would leave most of the more
sophisticated designs, such as the highly profitable Range Rover, in Britain.
In the long-term, a small Jaguar might be built in India, with the more lucrative,
more expensive models still made here. Such a strategy might yield impressive
global results.
Is the Jaguar an endangered species?
Last year, Land Rover built 232,548 cars and made a profit, although
not a huge one. Jaguar is different and much depends on new models the company
is developing. Jaguar simply does not sell enough cars to justify its present
production capacity and pretensions – and that is fundamentally why it
loses money. Having made 54,000 cars last year, it is a tiddler by global standards
and small even for a premium marque. It is dwarfed by BMW, Mercedes-Benz and
Lexus and is about half the size of also-rans such as Saab or Alfa Romeo –
in other words barely viable. It desperately needs to improve sales.
In the recent past, it suffered from too many "retro"
designs which, although elegant and superbly engineered, looked a bit fuddy-duddy.
Until recently, there was also few diesel options – a major handicap in
the European market. That is now being rectified with the release of the more
modern-looking XF saloon. Any replacement for the large XJ limousine and smaller
X-Type model, if there is one, will have to be similarly avant garde. Jaguar
and Land Rover will also have to catch up with the Germans and Japanese in advanced
engineering – not least in developing greener diesel, hybrid and hydrogen
fuel cell technologies.
Jaguar was also plagued, as it has been on and off since the mid-1970s,
by quality and reliability issues. Americans once joked that they bought their
Jags in pairs: one to drive while the other was in the garage. Quality has improved
vastly in recent years, but it takes a long time to rebuild reputations. Land
Rover has been just as bad but somehow seems to have escaped the stigma, and
is also moving up the customer satisfaction tables.
Are British jobs safe?
The unions seem cautiously optimistic but many analysts think that
Jaguar/Land Rover has one too many car plants. Its Halewood factory on Merseyside
is probably safe because it is more efficient than the Solihull (Land Rover)
or Castle Bromwich (Jaguar) sites. Jaguar closed its main plant at Browns Lane,
Coventry, in 2005, so its costs are lower than they used to be.
Can Tata do it?
The family-owned Tata conglomerate is a massive and well capitalised
company into everything from information technology consultancy to Tetley Tea.
More relevantly, it owns the Anglo-Dutch steel company Corus and its own automotive
division, which recently unveiled the Tata Nano – India's car for the
masses. If all goes well, Tata will invest in the Jaguar and Land Rover brands
and reap rewards which eluded Ford, thereby securing British jobs. In return,
Tata will learn much about the premium and executive car markets it is desperate
to enter.
Who owns Britain's car industry?
A collection of Japanese, German, American and now Indian based
transnationals. With the demise of MG Rover in 2005, the last remotely serious
volume manufacturer was lost to the nation. Most of our surviving famous names
are in the hands of "foreigners" – Mini and Rolls-Royce are
subsidiaries of BMW, Bentley is in the loving care of Volkswagen, Vauxhall is
still owned by General Motors of the US and Ford retains engine and van-making
operations in Britain. The biggest growth in the British car industry has come
from the Japanese brands.
Margaret Thatcher opened Nissan's plant in Sunderland more than
20 years ago and it is still one of the most efficient in Europe. The company
is the UK's biggest car manufacturer. Toyota and Honda are also significant
players and Tata will hope to emulate the successes of all three. Even the Malaysian
company Proton owns a slice of our heritage, in the sporty shape of Lotus, while
Nanjing Automobile of China is promising the return of small-scale MG sports
car production to Longbridge in Birmingham. The Russians own LDV Vans –
a vestige of the old British Leyland. Only specialist manufacturers such as
Morgan and Bristol can be said to be British in the traditional sense.
Does the UK industry have a future?
Yes. Nissan, (353,718 cars), Toyota (277,852 cars) and Honda (237,772
cars) have proved that Britain can make competitive products in large numbers.
They have taken up the slack from the end of car-making at historic sites such
as Longbridge, Ryton, Dagenham and Luton (although Morris Motors' old factory
at Cowley, Oxford, is happily churning out record numbers of new Minis). GM
will build the next generation Astra at the Vauxhall factory at Ellesmere Port,
while commercial vehicle production – especially vans, is at a high.
At the other end of the spectrum, Bentley is making 10,000 cars
in Crewe this year, while Rolls-Royce will build 1,000 at Goodwood in West Sussex.
Aston Martin, recently sold by Ford to private investors, is another winning
marque. Apart from Italy, no other nation is so successful at producing luxury
cars. Hopefully, Jaguar and Land Rover will continue to make their presence
felt as well.
Is the British car manufacturing industry safe for the
time being?
Yes...
* We still make more than 1.5 million cars each year in Britain,
the same level of production seen in the mid-1970s.
* Though British brands have been bought by foreign firms, that has not been
accompanied by the disappearance of UK car-making.
* Tata is a huge company, capable of injecting cash and new ideas into a company.
Britain could benefit from the purchase.
No...
* British car brands have been picked off by foreign buyers over
the past 20 years.
* While unions may be optimistic about jobs, some analysts say there are too
many car plants in this country.
* With Jaguar and Land Rover being bought by Tata of India, there are natural
fears of jobs being transferred abroad
Back to top
Face to face with William Riley, XPower man
RUSSELL GOWERS
"I've seen Bentley, and I've seen Aston Martin, and I know
what they can do in terms of quality. We can do better."
This was the bullish message that William Riley, holder of the
MG Xpower trademark and resuscitator of the MG SV project, gave out at the Pride
of Longbridge rally today. The founder of MG Sport and Racing Europe limited
said that he plans to expand his operation to produce between 1500-1800 cars
per year, despite fierce competition from the likes of Aston Martin and Porsche.
Riley claimed that MG Xpower had already delivered seven customer
cars, and that eighteen new shells had been produced by the company's subsidiary
in Droitwich, West Midlands. He dismissed claims that the company was merely
bolting together old MG-Rover cast-offs, stating that both the engine and bodyshell
supply chains were strong. Despite this, the car at Pride of Longbridge (the
same one which has been used in recent press photos) was on an 07 plate. "It's
a demonstrator, and yes it is one of our own shells," retorts Riley.
It was obvious to an observer that the standard of fit and finish
inside the cabin was not up to Aston Martin or Porsche standards. Exposed screwheads
were visible, and various pieces of door trim were missing. "That is because
this is the CS version, 150kg lighter than the standard car," claims Riley.
He also claimed that by lowering the compression ratio and raising the supercharger
boost, the MG Xpower SV WR CS (to give it its full name) produces nearly 600bhp,
but no documentation was available to substantiate this claim.
To raise the car's almost unknown reputation, Riley plans to enter
the CS into several hillclimb events, of which the first will be Shelsley Walsh
in May. But the buying public will be more interested in how well the car functions
on the road. If Riley is to sell even a fraction of the 1800 cars per year that
he so boldly targets, he will need to convince a potential Aston Martin Vantage
buyer that the SV WR is an attractive alternative. Put simply: if the standard
of fit and finish is less than exemplary, the car is unlikely to sell, hence
the brash claims about the competition.
Whether Riley can back up words with actions remains to be seen
Back
to top
MG is back on the road
John Griffin, Birmingham Mail, 8th April
THE MG is back - with a Midland car veteran beating Nanjing in
the race to relaunch the world-famous sports car. Exactly three years to the
day that Longbridge went bust, MG vehicles are once again being made in the
Midlands in the shape of the luxury X-Power model.
Worcestershire-based William Riley, a member of the famous Riley
motoring dynasty, has launched MG Sports and Racing Europe Ltd from a 2.5 acre
factory site in Eardiston, near Tenbury Wells. The £2m venture has already
created 17 jobs, including a handful of positions for former MG Rover workers,
with the factory producing six high powered MG X-Power WR vehicles a month.
The supercharged MG, a direct descendant of Longbridge's most expensive
model, sells for between £75,000 and £90,000. Seven have already
been sold and the fledgling firm has 35 other advance orders in the bag. And
Mr Riley has plans to eventually launch a purpose built 100,000 sq ft factory
within the M5 corridor, employing between 150 and 200 people.
Mr Riley, a lifelong car enthusiast, said: "We have bought
the badge rights for the MG X-Power from the administrators PricewaterhouseCoopers
- it has been a lot of hard work but it's going well and we are keeping the
MG brand alive. "We are in production, making six cars a month. It's very
early days but we are very encouraged. We have sold seven cars, all over the
UK, and we have got 35 other orders in the pipeline.
"We have exported five cars to America already, in various
stages of build. The people who are buying the model are young and middle-aged
executives who want an individual, British made sports car. At the moment, we
have got 16,000 sq ft of works and offices but in time, I am looking to buy
a piece of land or an existing building for a 100,000 sq ft factory, in the
M5 corridor, between Tewkesbury and north Birmingham. When we are in full production,
we would like to employ between 150 and 200 people. We