SAIC buys Nanjing, finally gets MG

The twisted saga of MG's resurrection from the ashes at the hands of Chinese automakers has come full circle. Last year both SAIC Motor Corp. and Nanjing Automobile Corp. fought tooth and nail for the right to build MGs in England, and Nanjing, the smaller of the two automakers by far, won. Since then the Chinese automaker has been trying to begin production of a new MG roadster at the company's plant in Longbridge, England. SAIC, meanwhile, accepted the defeat and instead purchased some MG production equipment and began building Rover sedans in China under the Roewe name ( Ford had cleverly exercised its option to purchase the Rover name from BMW, which meant that SAIC had to name its Rover sedans something else).

SAIC has gotten the last laugh, however, with its recent purchase of Nanjing. Nanjing bought Rover for an estimated $100 million back in 2005, while SAIC reportedly has agreed to pay around $1.9 billion for Nanjing.This means that everything SAIC lost out on in the bidding war over MG it has gained by acquiring Nanjing. Most importantly, this includes the Longbridge production facility. SAIC already has an R&D center in Britain, which it will consolidate with the Longbridge facility and use to begin production of vehicles in Europe. The automaker claims production of the MG roadster, as well as other MG models, will begin soon, though SAIC can also use those facilities for development and production of new vehicles for the European market sold under its own name. Why is MG so darn important to these Chinese automakers? As an established European brand with some street cred, MG is a small company that offers the Chinese an easy way into the lucrative European market. Perhaps instead of Rovers, we'll soon see Roewe sedans on the streets of London.

[Source: Reuters]

Share This Photo X