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MG Cars Revives Production Using Bolt-Together Chinese Parts

MG Motor MG6 automobiles sit on the assembly line at the SAIC Motor Corp.'s Longbridge production plant in Birmingham. Photographer: Chris Ratcliffe/Bloomberg
MG Motor MG6 automobiles sit on the assembly line at the SAIC Motor Corp.'s Longbridge production plant in Birmingham. Photographer: Chris Ratcliffe/Bloomberg

April 13 (Bloomberg) -- Britain’s iconic MG sports-car brand began producing its first new model in the U.K. in 16 years today using bodyshells, engines and powertrains shipped from China by Shanghai-based parent SAIC Motor Corp.

The MG6, a hatchback priced from 15,500 pounds ($25,000) and with a top speed of 120 miles per hour (190 kmph), is being produced for the U.K. market, with MG targeting as many as 3,000 sales this year, sales chief Guy Jones said in an interview.

SAIC inherited MG’s Longbridge plant in Birmingham through its 2007 merger with Nanjing Automobile Group Corp., which had bought the site after MG Rover, Britain’s biggest carmaker, went bust with the loss of 6,500 jobs. SAIC had previously paid $116 million for Rover design rights and may be renewing U.K. output as a prelude to selling a Chinese-built version of the MG6 in Europe, according to automotive analyst Peter Schmidt.

“It’s quite a cunning, window-dressing exercise to prepare the public for the inevitability of Chinese-made cars being imported into the U.K. market,” said Schmidt, managing director of Warwick, England-based Automotive Industry Data. “I’d view it as a pilot scheme, just to test the water.”

‘Sports Fastback’

The MG6, designed by Tony Williams-Kenny, a former Rover employee, has a 1.8 liter turbocharged petrol engine and can accelerate from a standing start to 60 mph in 8.4 seconds.

The five-door car, which MG is styling a “sports fastback,” goes on sale later this month via a network of 38 U.K. dealerships, with a further 23 to be added “fairly soon,” company spokesman Doug Wallace said.

Longbridge currently employs more than 300 designers and engineers, and MG will also introduce a sedan version of the MG6 in the U.K. this summer, Wallace said. Future projects and engine variants could lift production to “tens of thousands” of vehicles in coming years, according to Jones.

SAIC, China’s biggest carmaker, is already producing the MG6, which is based on the Rover-derived Roewe 550 model, in its home market.

“The plan is to create a strong foothold in China and then a presence in the key European markets,” Jones said on Bloomberg Television’s The Pulse with Maryam Nemazee. “The next five years will be a very exciting high growth period for our business.”

U.S. Market

It’s “too early to say” whether MG will target the U.S., previously one of its biggest markets, Wallace said, though expansion into continental Europe will begin when a new diesel engine becomes available next year.

Asian automakers have bought European assets to gain access to technology and brands that will encourage sales.

Ford Motor Co. sold Sweden’s Volvo Cars to Zhejiang Geely Holding Group Co. of China last year for $1.5 billion after disposing of U.K.-based Jaguar Land Rover to India’s Tata Motors Ltd. for $2.4 billion in 2008.

MG was cast aside by Bayerische Motoren Werke AG in 2000 as the world’s biggest luxury car maker unwound its 1994 takeover of Rover Group, from which it retained only the Mini brand.

BMW had bought the U.K. company in 1994 for 1.2 billion euros ($1.74 billion) and ended up losing 6 billion euros over the next six years as the unit’s market share shrank, with the results sparking the dismissal of then-CEO Bernd Pischetsrieder.

The German company sold MG Rover for a nominal 10 pounds to Phoenix Venture Holdings, a private-equity firm run by ex-Rover manager John Towers, before the venture collapsed owing 1.3 billion pounds in 2005.

MGB, Midget

MG was founded in 1924 near Oxford, becoming known for two-seater sports cars including the MGA, Midget and MGB, which ceased production in 1980 after the company was bought by the precursor of Rover Group as the U.K. car industry consolidated.

For 12 years the MG badge was applied to sportier versions of other models until Rover revived the two-seater in 1992 and added the all-new MGF in 1995. Phoenix continued making the MGF and new MG TF, together with rebadged models, with production switching to China following the takeover by Nanjing Auto.

To contact the reporters on this story: Steven Rothwell in London at srothwell@bloomberg.net; Maryam Nemazee in London at mnemazee@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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