The Finch Formerly Known As Gold

28 March 2007

No Chinese British sports cars for you

National Public Radio is reporting that China's Nanjing Automotive is abandoning plans to assemble the MG automobile in Ardmore, Oklahoma, even as the first Chinese-built MGs are coming off the line.

Possibly supporting this story is this quote from Nanjing MG general manager Zhang Xin:

Despite high expectations on the Chinese domestic market, Mr Zhang says the priority is the British and European market. "British people like their own brands, and people in other European countries and the Commonwealth know MG's performance well," he says. "Nanjing MG will provide them with the same or better driving experience. We will make the best MG cars ever."

No mention of North American sales at all. Then there's this:

Duke Hale, the chief executive of Nanjing's U.S. business, which was to assemble MG TF roadsters from kits, left the company this month, reportedly being disappointed that the Chinese company had scaled back its planned production and sales operations in the U.S. — plans elaborated by Mr. Hale rather than by the Chinese company.

There is also a suggestion that tweaking the MG designs to meet US standards might have proven more difficult than anticipated.

Duke Hale had had big plans for MG, but if there's one thing certain in the auto industry, it's that nothing is certain.

Update, 1:45 pm: The Oklahoman reports:

"My understanding is that there is no more plans with the Oklahoma plant," MG's Paul Stowe told NPR. "We are discussing possible ventures in America in the future, but I don't believe there's anything on the table at the moment with Oklahoma."

British media reports have identified Stowe as quality director for Nanjing's MG division. He relocated to China from MG's former factory in Longbridge near Birmingham, England.

A joint statement from state and local officials in Oklahoma said Stowe was not speaking on behalf of the company.

"This individual is not a senior member of the team working with Oklahoma Global Motors and is not currently involved in moving the project forward," the statement said. "Representatives from ... MG in the U.K. have confirmed that his statement was not an official announcement by the company and reflected his own opinion and not that of management."

Officials said the deal was a complicated project "with individuals and companies on three continents, a foreign government and a former company in bankruptcy."

The statement was issued by the state, Greater Oklahoma City Chamber of Commerce, the City of Oklahoma City and the Ardmore Development Authority.

See "Nothing is certain," supra.

Addendum, 7 pm: Statement by Richard Rush of the State Chamber, with audio, denying the NPR story.

Posted at 8:22 AM to Driver's Seat , Soonerland

But, that can't be right. Air quality standards in China are higher than the U.S. global warming experts say so!

Posted by: Bill Peschel at 10:18 AM on 28 March 2007

This deal has been a little strange from the beginning. On July 12, 2006, I posted this:
Ardmore to build Chinese MG’s

And later noted on that same post:

It turns out the new venture will be primarily a U.S. owned operation.

Joining Nanjing will be two U.S. investment funds, Oklahoma Sovereign Development LLC and Davis Capital LLC, The Wall Street Journal reported Wednesday. The two U.S. investors will hold a 51-percent stake in the venture, with Nanjing owning the rest.

One week later, I found this:

Not so fast, Okies! That’s the word from China’s Nanjing Motors, new owner of MG-Rover. Last week, word came down that the company is reportedly planning a factory in Oklahoma to build new MG sports cars for the states, with the first models coming in two years. But at the British Motor Show, the company distanced itself from the news like it was 100-year-old oyster sauce.

‘We have only signed a memorandum of understanding with a local partner (in the US) as yet,’ said Jianwei. ‘We might have three production bases. It is only a thought that we might have Oklahoma in addition to China and the UK.’

Nanjing sounds like only a passive partner in the deal. I'm curious as to who owns the LLCs.

Posted by: MikeH at 7:45 PM on 28 March 2007

There is a long history of automotive distributors independent of the actual automaker: one of the things that Studebaker-Packard did while attempting to keep the financial wolves at bay was to sign on as US importer of Mercedes-Benz cars. Daimler-Benz had an office at South Bend, but I don't think there was any actual equity on either side.

Posted by: CGHill at 9:10 PM on 29 March 2007