MG News

This report brings with it a change of title to reflect the true nature of the fact that MG Rover News is no longer an applicable title, except as a reference to things that connect to before July 2005 when the assets of MG Rover were bought by Nanjing Automobile Corporation. The company title in the UK now is NAC MG UK Ltd with the registered address at Longbridge.

Mr Yu Jianwei in the centre answers questions from the press

Professor Garel Rhys

I reported last time with confidence that their tenure at Longbridge was for the long term, and whilst there had always been the trapdoor escape clause in the lease agreement of six months duration, I never saw anything that pointed to this being exercised. Indeed looking around during visits to Longbridge it was clear that the inside of that trapdoor had since been ‘concreted’ over with the foundations of the new venture, even as that lease agreement was being signed, although from the outside the trapdoor remained visible for others to talk about.

NAC MGs progress is like climbing a tall ladder and so far they have been taking a step at a time, making clear progress, but with a considerable number of further steps to be taken. Stability on the ladder was somewhat shaken in mid July by winds generated by the press conference in Oklahoma, USA, when to the surprise of many came the announcement of a brand new MG factory to be built at Ardmore, near Oklahoma, to build the new MG TF Coupe. The format of the new company, MG Motors North America Inc, is said to be a 51% US investor ownership and 49% NAC. The conference was fronted by the chief executive of the new company, Duke T Hale, who unfortunately displayed too much resemblance to another well known US Auto man, John DeLorean whose impact on the UK auto industry was; well, let’s just say unsuccessful!

The presentation was factual, but unfortunately delivered in a very barbed way from a UK perspective. Oklahoma is world famous for being in Tornado Alley and on this afternoon the presentation ripped a great swage through the UK leaving a debris trail not dissimilar to the aftermath of a tornado. It was certainly a presentation aimed at the domestic US audience, but MG is already a global brand in terms of perceptions if not yet in product, so it was logical that it would be beamed far and wide and this and the outside the US responses should have been anticipated.

This storm has rather deflated the positive elements of the concept of MG assembly on the US continent. Certainly if NAC wishes to expand to a global position as it desires, then such a facility makes sense, just as it has for other non US based auto makers, and I will mention just BMW as a good example. Going from concept to a viable business is yet another rather tall ladder and to achieve this needs the right product with the right quality and at the right price.

Having the right product for the right market does question the choice of the TF Coupe as the product for this new US facility, although being a brand new model does carry some weight. The question mark arises when the historical MG sales figures are viewed. If these reflect the current trends with US buyers then perhaps the coupe is not the right choice. Why, well MGB sales were very strong and it is worth noting that the MGB roadster sold at a rate of over 6 to 1 against the MGB GT in the Sates.

In the UK the sales of MGB GT models outstripped Roadster sales by approx 1.25 to 1. That does seem to indicate the Roadster is a better prospect for the US, although just like the MGB and the MGB GT, TF roadster and TF Coupe should be equally easy to assemble on the same lines, so let’s see what develops, but MG back in the US is a very positive thing and now many people will have to work very hard to make it work.

In the aftermath and fallout of the Oklahoma conference was NAC MG’s already arranged high profile press conference held at the Waldorf Hilton in London, the day before Press Day of the London Motor show. Timed to catch the motoring press as they were gathering for the show, and with no MG presence this year, it was the best MG aspect that could be delivered. Unfortunately the pre-event publicity rather overshadowed the content. Nevertheless there were some positive developments and shockingly one that I considered to be highly significant has seen no, or very little, mention since.

Promotional stand at a recent NAC MG Marketing Event in China

 Sitting at the front provided a clear view and hearing of the presentations and the salient points of NAC President, Mr Yu Jianwei. These can be summed up as…

• The commitment to Longbridge with an initial investment of £10M, thus removing the six-month doubters.
• The restart of assembly of the TF, in updated format, during the first half of 2007, read that to probably be June. Production capacity of up to 15,000 TFs will be available, and if reached will be higher than any single annual year’s production of either MGF or MG TF.
• The cars to become ‘commercially available’ during the second half of 2007, read that to be a flexible date dependant on progress towards a dealer chain, and not to assume cars made on 30th June will be available to buy on 1st July, although NAC MG would like to be able to offer this.
• The setting up of a research and development centre at Longbridge working hand in hand with a similar centre in China, not just on minor facelifts of existing models but on fresh new models.
• The return on sale in the UK of updated MG ZT range (note their use of title ZT) during 2008, subject to market conditions.
• All models to offer significant enhancements over the models built up to April 2005, not just some of the enhancements that were well developed by MG Rover and already planned for introduction, but new ones with some that are really quite interesting.

All these commitments are relatively small in global auto industry terms, but with contact with NAC and being able to understand their ways you see they don’t do big leaps, they climb that ladder a rung at a time, steady solid forward progress with an ultimate goal in mind and a clear focus to get there.

Indeed the nature and rather tornado style presentation at Oklahoma, so out of style and culture of NAC, generated a rather effective ‘distancing’ approach at the London Conference with Mr Yu simply clarifying the NAC position by saying, “We have signed a letter of intent and everything else is subject to negotiation.” He went on to also reduce the apparent control and global importance of the US company, when compared to what was said in Oklahoma.

At the end of this conference there was palpable degree of disappointment amongst many of the press representatives present, with many feeling let down that there wasn’t a commitment to a huge number of employees and 100,000 plus vehicle production. In fact many comparisons to MG Rovers’ last full year of 110,000 vehicles with the 15,000 TF figure has, and will continue to be made, with no reference to that 110,000 figure being made up of ten different model lines on three assembly tracks, against just the single model TF. The other somewhat overlooked but the major point is that 110,000 vehicles was well below break even point for MG Rover and one reason the finances were drained dry. The 15,000 TF ceiling is planned to make for a profitable operation.

Finally on the subject of this conference were the comments of Professor Garel Rhys who was master of ceremonies for the event. The Professor is as many of you will already know, one of the most internationally respected auto industry academics and someone to whom international motor giants come for advice. The press usually listens too, and certainly has when he’s commented before on MG Rover needing a strategic partner to survive. Odd then that whilst addressing the gathered audience his comments that the MG plans we were about to be given could in his opinion work, have been hardly reported.

Aerial view of proposed NAC MG Customer Centre

Once again by the time you read this we should see that NAC MG has moved upwards on that ladder and continued to make progress. In due course there will be more recruitment, although this is ongoing all the time, just as there is a continued hive of activity behind the closed doors of Longbridge. My view of this activity is ‘more than adequate’ and where I derive confidence for MGs future. Let me provide a historical reference to quantify the depth of the term ‘adequate’. Back in July of 1989 my MGB V8 EFi and I went to a Rover Group Board meeting at the then company HQ at Canley in Coventry. The result of that meeting was that the Adder project went from a concept to a project to make a production car, the MG RV8. In the period from then until 1992 when the car was launched I was bound by confidentiality. Today the same situation applies again!