Thursday, 2 August 2007

MG-Roewe?

In my last BLOG I suggested that the most over asked question I received was about the comparison between the ROEWE 750 and the MG7. Well no sooner do you report something, than everything changes. Since last Friday, when both NAC and SAIC went public with there plans for world automotive domination – my phone hasn’t stopped ringing!

It was something that had been muted ever since SAIC’s chairman Chen Hong, announced on the opening day of the Shanghai Motor Show that both companies should look at ways of cooperating. Since then the press has been full of speculation, while the companys took a vow of silence.

The press release itself was typically Chinese, revealing very little and allowing the journalists very little to work with, which however means that they have the opportunity to report as much that can be gained from reading between the lines, and gaining quotes from “Insiders”, “industry experts” and I noticed that in several reports – even quotes from my BLOG!

The release kick-started a frenzy of phone calls from all corners of the media, from as far away as the US, Europe and of course from the ‘independent’ media in China.
So to prevent my brain continuing to boil from over using my mobile, I thought I would go into print on what I know.

Before everyone gets excited – I don’t know a lot! In fact what I am going to write is based purely on my interpretation of what I read and what I see, this is by no means a company statement or an official line (That would have been a very short – “No Comment”). I thought I would get that in before the hacks that read my BLOG decide to use it as an exclusive!

It is very obvious that the Beijing government is embarrassed by the constant media reference to two Chinese company’s building the ‘same’ vehicle, and competing for the same target audience. Beijing also has a responsibility to ensure that the money it provides to develop the Country is well spent, and provides the best ‘return on investment’. Providing money to finance two company’s to compete against each other, by many people - may not be seen as the best way to spend 'tax' payers money? To this end, Beijing sent the message to both local governments ‘get you act together’, and see what can be done to reduce costs, improve profitability and develop the local Chinese industry to beat the foreign opposition – not each other.

Once this message had been delivered, both corporations had to tow the government line. To be honest that was what I thought it would be, just a fa├žade of small announcements of cooperation to keep the Beijing government happy, maybe even a very public deal to work on a joint skunk project to develop an orange juice powered engine or something – whilst never really going the full way to a joint venture or even – dare I say – a “merger”.

I say I thought this would be the case, because during the last few days my mind has been changed to actually believe that there may be more to this. During one of the normal factory tours this week, and in amongst a group of 20-25 people I thought I recognized a few of the faces mingling around the vehicles on Display. I approached their guide who was a senior manager for the company – and she informed me that they were here from SAIC, and had been on a tour of NAC assets! In fact they had been here since Monday – only 48 hours after the announcement.

Now this may be part of a reciprocal visit by NAC senior management to Shanghai to review SAIC’s assets? Or perhaps a valuation tour, to ensure that any investment they make is actually buying them something (We don’t want to make the same mistake twice do we chaps?), Or just part of the normal due diligence process? I don’t know – but in my eyes this sparks a very open and positive step towards some form of cooperation behind my expectations.

So what would cooperation mean for NAC? And more importantly you’re probably thinking - for Longbridge? In my view the move can only be perceived as a positive step for both the MG brand and the UK factory. SAIC have an abundance of money, vast experience in the Chinese car market, they have employed some of the best engineer’s available whilst recruited some real heavy weight professionals to help them deliver worldwide domination. NAC on the other hand, has passion, a magnificent brand, fantastic facilities and a European headquarters – they are loved by the media, and offer a personal face to the rest of the world – something SAIC have been struggling with.

Of course cooperation could mean that MG becomes absorbed by another faceless conglomerate, making sterile cars for sterile markets, but knowing some of the engineers who are at the forefront of vehicle design for the ROEWE brand, they will fight to the end, before letting that happen.

So what does the future look like? Could it mean that the engineers at the former Ricardo2010 operation all move back home to the PDC? (Product Development Center – Longbridge), That we will see the ROEWE 750 be re-badged at an MG750 for the European market? And what of the new cars under development by SAIC/ROEWE? – Who would have thought that 2 years after the demise of MG-Rover, that we good be at the dawn of a complete new range of MG vehicles hitting the UK, European and even World Streets – funny old world!



This weeks Poll – A merger between NAC and SAIC – Good? Or Bad?


Last weeks Poll Results:
Which Car do you prefer MG7 or Roewe 750.
MG7 = 84%
ROEWE = 15%
Not sure what happened to the other 1% - perhaps they preferred the Honda Accord?

(Those of you who sent questions in – don’t worry all will be revealed next week, along with one or two surprises!)

1 comment:

Austin-Towers said...

Where's the new blog then? The suspense is killing me!