News that China’s Nanjing Automobile Company (NAC) has entered into a joint venture to build MG cars in Oklahoma, USA, makes perfect sense for a brand that, despite its long absence, is still held in affection by American fans of great British marques. The proposed three-way marriage between General Motors (GM), Renault and Nissan, on the other hand, makes no sense whatsoever. These recent stories from the automotive sector show an emerging Chinese carmaker that’s more than on top of its game, and the desperate flailing of an American manufacturer falling apart under its own mismanagement.
When MG Rover went under in 2005 it looked like the end of the road for two famous and once revered automotive brands. Several companies scrabbled to pick over the remains, with NAC and Shanghai Automotive (SAIC) of China emerging as the eventual winners of the confusedly shared spoils. Now SAIC is finalising an evolution of the Rover 75 (though it has not yet gained rights to use the Rover name). More significantly, NAC has announced plans to re-launch the MG brand worldwide with a full model range of sports cars and saloons/sedans, first in the UK and Europe and then in North America.
The venture shows NAC to be a very smart player. The majority of manufacturing will take place at its low cost factories in its home market, assembly for the US market will be completed at Oklahoma, and British heritage will be maintained (which SwelledHead stressed as being vital to the value of the brand) by building specialist sports models at the historic Longbridge plant near Birmingham in England. The newly designed MG TF Coupe planned for Longbridge is pictured here.
This shrewd distribution of production demonstrates that NAC has got its plans right if it wants to succeed against tough competition in the global car market. Costs are kept low, there’s international reach and the claim to British heritage is just about intact. Building in Britain and the US also helps assuage fears that Chinese industry will simply steal jobs from the West. The final stroke of genius is the appointment of experienced American auto executive, Duke T. Hale, to be chief executive of the North American and European revivals. He understands better than the Chinese how to market the MG brand to Western consumers and, particularly for Americans, puts an innocuous face on a scary Chinese corporation.
A welcome and seemingly well thought out return for MG in the US gives ironic contrast to the state of affairs at GM. It was decades of mismanagement that brought British-owned volume car manufacturing and its many brands to the end or to the brink, and the same charge can be levied at the American leviathan across the pond. Though The General has embarked on a massive cost cutting drive aimed at turning the business back to profitability, many analysts see it as being too late. It seems distinctly odd then, that the united force of recently turned-around Nissan and about-to-be-revived Renault might be interested in buying a major stake.
Just how little sense a GM/Nissan/Renault deal makes is best explained by automotive journalist and blog writer, Robert Farago, on his website The Truth About Cars. Follow this link to read his account of some real motor industry madness.
