MG gears up for a revival
New life for a historic British brand.
Many said it could never happen but on 1 August, almost three-and-a-half years after the collapse of UK car maker MG Rover, production resumed at the former Rover facility at Longbridge near Birmingham, UK.
Now operating under the control of Chinese group Shanghai Automotive Industry Corporation (SAIC), the factory is slowly churning out a slightly revamped MG TF. Five hundred limited-edition vehicles are to be produced, with the first expected to hit the showrooms within a few months.
Does this herald the beginning of a new era of car manufacturing at Longbridge? Not quite. Described as a 'screwdriver' operation by some industry pundits, right now around 180 workers are assembling the MG TFs from a kit of parts shipped over from China.
And while we will see additional products trickling out of Longbridge, a return to full-scale production there is not on the cards.
As Ian Pogson, principal quality engineer at the UK technical centre of SAIC, points out, it is very expensive to make vehicles in the UK.
"[Following its recent merger with Nanjing Automotive of China], SAIC now runs the Longbridge facility with 100 or so people who have been keeping the place ticking over," he explains. "We once had three assembly lines producing the MG Rover 25, 45, 75 and TF, but this equipment has been taken to Nanjing, China and is running there."
So with its depleted lines, what can we realistically expect from Longbridge? Output will never rival the figures we saw a few years ago; in 2001 more than 170,000 cars were sold. However, Pogson maintains that SAIC will keep Longbridge operational, and hints that the next product could be an MG version of SAIC's recently released Roewe 550 saloon.
But while resumed manufacturing at Longbridge has brought fresh hope and excitement to Birmingham, a new role for the plant is emerging which involves much more than scaled-down car production.
MG Rover went into administration in April 2005 when its proposed rescue deal with SAIC collapsed.
According to Pogson, then working at MG Rover: "SAIC did what any good business would have done - it allowed the company to go into bankruptcy. There were then two main players in the race to pick the company up; SAIC and Nanjing Automotive."
After the collapse, Nanjing took the UK manufacturer's physical assets - sites and equipment - while SAIC walked away with the intellectual property rights as well as some of the best engineers from Longbridge.
However, the rights to the 'Rover' brand were retained by MG Rover's former owner, BMW, which sold the UK firm in 2000, with the Rover brand eventually going to Ford. SAIC is therefore unable to call any new model a 'Rover'.
SAIC partnered with engineering consultants Ricardo and set up a UK-based research centre, Ricardo 2010. This growing band of engineers, now totalling around 250, is sited at the Ricardo site in Leamington Spa, UK and is now busy designing new engines, transmissions and cars for SAIC.
They initially recreated the Rover 75 for the Chinese market. With a slightly extended wheel base, the resultant Roewe 750 was launched in November 2006. Now, with thousands of advanced orders in tow, the Roewe 750 marks the first in an intended full range of premium models aimed at the Chinese market.
The UK-based engineering team also developed a new medium car for China, the Roewe 550. Unveiled at the Beijing motor show in April this year and described as the 'Rover that never was', the 550 is based on a shortened Rover 75 platform and has been developed from the very model MG Rover was working on when it collapsed into administration.
"If you look under the bonnet and you're an automotive anorak, you'll see some of the design traits of the people who made the Rover 75 originally, as it's the same people who did it," Pogson says. "But we've moved on. We've got new technology and new materials, and we've tailored what we do for Chinese manufacturing and the Chinese market - the Chinese like a lot of chrome and 'bling'. It's a good-looking car and we've had thousands of advance orders."
Pogson also points out that engines for the 750 and 550 have been in production at SAIC's recently built Lingang factory, south of Shanghai, for some time now.
"These are measurably better than those produced at East Works Longbridge as we were able to recruit and train a new, disciplined workforce, buy all-new equipment from top manufacturers, iron out process issues that had been plagued by short-sighted UK financial controls and improve many design aspects to bring the engine up to current standards," he explains.
So as the ex-MG Rover engineers have been creating cars, SAIC has been building its future. Its Chinese research centre, opened in December last year, employs around 1,000 workers.
Having cracked the Chinese car market, the company now wants to export its product to Europe and the States, and has already taken the first steps.
While SAIC currently has its 300-strong team of ex-Longbridge engineers scattered between the Ricardo site at Leamington Spa, a design studio in Coventry, UK and SAIC's Shanghai Technical Centre in China, a move en mass to Longbridge looks imminent.
Industry reports predict this move will take place before the end of the year, and although SAIC has not openly declared its intent, Pogson says: "We are developing plans for the potential establishment of a technical centre at Longbridge."
And the repercussions could be immense. The move would not only renew local industry in Birmingham, but would boost SAIC's chances of breaking Western car markets.
As motor industry expert Professor Garel Rhys of Cardiff Business School points out, Longbridge gives SAIC an established outlet for selling cars to Europe. What's more, its location and heritage impart the necessary credibility to do so.
"The Chinese automotive industry needs to learn how to make internationally accepted products, how to market them and how to design them," he says.
"Shanghai [Automotive] is eager to use [Longbridge] to give them the expertise and capability to make cars within developed automotive markets. They will then have an export business and will be able to say, 'yes, we own this but these are European cars of a European standard' because they are effectively designed in Britain."
Silicon valley, UK
Rhys also believes Longbridge will allow SAIC to tap into the UK's wealth of automotive research.
Dubbed Silicon Valley in the world automotive industry, the UK has a strong, independent design cluster including the likes of Ricardo and Cosworth.
"Shanghai has done its homework as to why it should develop a UK research facility, because it can plug into as many joint ventures as it wants with this huge research cluster," Rhys says. "[The company] is so determined to make a success of what it has bought; it gives them a fantastic opportunity and advantage over other major Chinese operators, such as First Automotive Works and Dongfeng."
However, the path to Europe will not be straightforward for SAIC. Rhys recalls the controversy surrounding Jiangling Motor's Landwind, a Chinese-built SUV and the nation's first European export.
The vehicle made headlines in 2005 after the German car club, ADAC, carried out a EuroNCAP crash test and revealed a driver would not survive a head-on collision at 40mph. Crash test videos are still viewed on video-sharing website YouTube today.
"Consumers remember this and won't go back to it," Rhys warns. "You know, people still think Lancias and Fiats rust. Yes, they did 30 years ago but it's very difficult to get rid of a poor reputation."
But, unlike Landwind, the Roewe 550 prototype scored an impressive 4.5 stars in EuroNCAP tests after the ex-MG Rover engineers used predictive software to simulate crash conditions.
If SAIC sets up Longbridge as its European research centre and carefully pursues export plans, SAIC cars could hit Western streets before long.
"I think within five years [SAIC] will have products capable of being exported to Europe and North America. And given the huge advantage of Western engineers and designers, as inherited from MG Rover, the company could well be doing it before then," predicts Rhys. "Certainly, within ten years [SAIC] is going to be a pretty major player in many parts of the global motor industry."
We already have the Roewe coming of Longbridge and aimed at China, but what of the MG badge? Pogson predicts a possible rebirth of the MG brand, adding: "[The Roewe 550] may well be badged an MG over here."
Either way the global motor industry is worried and waiting. According to Rhys, the General Motors and Toyotas of this world are already gearing up for future Chinese rivalry, ensuring production costs and speed of design are competitive.
As Pogson says: "Shanghai Automotive will make a success of this. They have the drive, self-belief and financial backing. Woe betide the Ford executive who doesn't keep an eye on what's going on out there."