Could there be a merger?

[Ken]

Found this earlier today, interesting reading. Its dated June 29th http://www.expressandstar.co.uk/2007...fuels-mg-hope/

£500m deal talks fuels MG hope
The two Chinese car companies that each own a chunk of the collapsed MG Rover are in talks that could lead to a £500 million takeover deal.

Nanjing Automobile Company (NAC), the firm which is restarting production of MG’s at Longbridge this summer, is in talks with bigger rival Shanghai Automotive, which has launched its own version of Rover’s 75 saloon, called the Roewe 750.

Reports from China suggest that the Beijing government is trying to broker a merger between the two.

The leadership, which has a major stake in both businesses, hopes they can jointly relaunch MG and sell cars into Europe and the rest of the world.

It wants them to combine their development, production and marketing efforts as both are marketing cars based on the old Rover 75 saloon.

Eleanor De La Haye, spokeswoman for Nanjing’s UK MG business, said: “The talks are more about the possibility of a working partnership. It is no secret that the Chinese government has ordered them to talk and that is what they are doing.

“The discussions at the moment focus on the mutual benefits that can be gained by them working together.

“Shanghai Auto is a big company - it is like the Ford of China - but NAC is the first Chinese car company to a globally recognised brand in MG. This could mean expansion for the development facility at Longbridge,” she added.

Both Chinese car companies ended up with parts of the MG Rover business after the business collapsed.

Nanjing Automobile bought the Longbridge business in 2005 for £53 million, getting the production equipment and the MG name.

But the Rover name, still owned by BMW which ran Longbridge in the 1990s, was later sold to Ford.

Shanghai Automotive, China’s biggest car company, had been in talks with MG Rover for a possible bail-out but backed away at the last minute, pushing the fatally weakened car company over the edge.

The failure of MG Rover left debts of £1.6 billion and cost 6,500 workers their jobs.

But Shanghai was left with blueprints for the Rover 75 and 25 cars. Earlier this year Hu Maoyuan, president of the firm said at the Shanghai Auto Show that his company wanted to co-operate with Nanjing Auto.

[JohnDotCom]

Hope not or Bang goes the quality MG7 finish.
Comments from anyone.....

[Ken]

Originally Posted by JohnDotCom

Hope not or Bang goes the quality MG7 finish.
Comments from anyone.....

Could go the other way John? The Chinese government may force them to make both to the quality of the MG7 if they want to come into Europe and the rest of the world as it say's in the report.

[JohnDotCom]

That of course would be a good result but seeing both the Crash test and first reports of the Roewe 750 their quality at present appears to be awful against the MG7 which is stated as Excellent even down to getting rid of Bonnet Gap.
I hold my breath but as you say to break into foreign markets they will have to improve.......

[RichardK]

Originally Posted by JohnDotCom

That of course would be a good result but seeing both the Crash test and first reports of the Roewe 750 their quality at present appears to be awful against the MG7 which is stated as Excellent even down to getting rid of Bonnet Gap.
I hold my breath but as you say to break into foreign markets they will have to improve.......

and according to someone who has spoken to NAC MG...the MG7 will be built in Longbridge next year...towards the end of the year...it won't be imported from China.

I hope they don't merge..there might be some mileage in a JV and component sharing (whilst the models share components..they may not in the future)..but otherwise I think MG has the lead at the moment.

Richard

[m0sko]

Latest news from the Birmingham Post:

Nanjing takeover date is set

Dec 13 2007

By John Revill


A full takeover of Nanjing Automobile by its domestic rival Shanghai Automotive will be sealed on Boxing Day, The Birmingham Post has learned.

The two companies - which have competed over the MG Rover legacy - have agreed in principle to a merger to create a Chinese automotive giant.

Under the terms of the deal Nanjing Automobile Corporation would own no more than 15 per cent of Shanghai Automotive Industry Corporation.

But sources said the deal would not affect NAC's plans to restore vehicle production to Longbridge and relaunch its version of the MG TF early next year.

The deal would create the biggest Chinese automotive maker, with a combined production of more than 1.6 million vehicles. It would be a step towards creating a national Chinese car champion that would eventually compete head-on with global giants. The Beijing government is seeking to strengthen the industry by encouraging tieups and mergers.

No names have been decided for the new joint company, although East Ocean Company is among those under consideration.

A source said: "This will be good news for Longbridge. SAIC will bring more products and volumes at Longbridge will be higher than before.

"It is a logical move. SAIC is much bigger than NAC and has more money. Joint groups could work together on the engineering and research and development."

The takeover could also pave the way for NAC's blueprint for Longbridge, which will see part of its portion of the old South Works site redeveloped.

A new design centre could be set up, to house the 250 engineers who have been working for SAIC at Ricardo's site in Leamington. The source added: "Instead of having two separate R&D centres there could now be one. The total investment in R&D, manufacturing and sales and marketing will go up." No new buildings will be constructed under the blueprint, although existing offices will be refurbished. The blueprint will also include greater capacity for production and a better logistics and quality control.

This will be necessary as part of the plan is to source more components from China to ensure profitability and reduce the problems the firm has had with defective parts imported from the Far East. Broken windscreens were among the parts which delayed the relaunch of the TF from this year into 2008.

SAIC is thought to have said it does not want to interfere with NAC's plans.
The source said: "SAIC respect NAC's plans but will look at how to improve things in the future. That is the Chinese way, one firm will not say 'I am the boss', they will co-operate."

The long delayed relaunch of the MG TF will still go ahead at either the end of February or the beginning of March under the plan.

But the deal, although a takeover, has been approved by both companies. "It is like a marriage. If you want to marry someone it is impossible if the other person doesn't like the other one. Once these companies were competitors, now they have become part of one family, which is very good for sales and marketing for example.

"Of course this is good news for Longbridge, because it means a bigger firm. It means there is going to be more money to develop the next generation of cars. SAIC has some very big ambitions to redevelop this area. It will be giant company," the source added.

A spokeswoman for SAIC said: "Apart from a July 26 letter of intent to cooperate with Nanjing Auto, no new agreement has been signed so far." She said she did not know when a deal might be announced.

SAIC's ventures with General Motors and Volkswagen are China's biggest car sellers, with combined sales of 441,584 cars in the first half of 2007, or 14 per cent of the market. But the company faces tough competition in the commercial vehicle area from local rivals FAW Group and Dongfeng Motor. Nanjing Auto's MG brand cars, Yuejin light trucks and Iveco light buses could be valuable additions to SAIC's portfolio.

adam

[e668ecp]

I hope they merge.. Nanjing have messed about for far too long and don't have anything in development. They need the resources etc of SAIC and SAIC need a decent brand.

I notice that a load of new dealers have appeared on www.mg-uk.co.uk

[oakridge]

According to information published 'in another place' the merger is done and dusted. And have you heard the one about the return of Rover possibly as part of Tata buying JLR which would include the Rover name.

Malcolm

[e668ecp]

Originally Posted by oakridge

According to information published 'in another place' the merger is done and dusted. And have you heard the one about the return of Rover possibly as part of Tata buying JLR which would include the Rover name.

Malcolm

Merger is apparently signed on Boxing day.

Can you believe that we as a country now have sunk to this level? MG is Chinese and JLR (possibily to include Rover) is tipped to be bought by the Indians

[Jules]

I think the only way forward for UK in the Manufacturing industry would be to halve the value of our assets ie. Land, housing factories etc, and halve everyones wages, otherwise we are never going to be able to compete with any company overseas.

I can only see Longbridge being involved on a very minimal scale (if at all)
Who in their right mind is going to pay British wage levels when they are a fraction of this in many developing Countries.