New MG heralds major push into UK and Europe for Chinese

THE re-introduction of volume car production at Longbridge could herald a major push by Chinese car firm Shanghai Automotive into the UK and Europe, a Midlands motor analyst has suggested.

John Leech, Midlands automotive sector leader at KPMG in Birmingham, said the situation was similar to the one back in the early 1970s when Japanese manufacturers began their push into Europe.

SAIC has said it plans to produce around 3,000 of the new MG6 models at Longbridge in the first year , a tiny figure when compared with the volumes coming out of Japan or other Asian markets such as China and South Korea but nevertheless significant.

When SAIC first began producing the MG TF sports car at Longbridge in 2008 it was working on similar volumes – around 50 vehicles a week.

The 17-strong assembly team were working on one of the former MG Rover assembly lines and using parts shipped from China and the EU.

The new MG6 also uses China sourced parts but new assembly machinery has had to be introduced to the plant to enable the operation to be completed.

The assembly team is larger now than for the MG TF production but is still only a niche operation.

While 400 people work at Longbridge, 300 of them are based in the SAIC design centre working on new model development.

However, Mr Leech said there was scope for growth.

“The Chinese realised they could not just import the Roewe 550, on which the MG6 is based, into Europe because European drivers demand more luxury,” he said.

“They are using the MG6 as a launch pad into the European market and if it is successful then there is scope to increase production to around 40,000 cars a year.

“It is a crowded market in which to sell a new car but they have been careful with the pricing and the entry level car is just below that of its Korean equivalents and this, together with the kudos still attached to the MG brand could be decisive.”

The company is also ramping up its dealer network although most will be distributed to multi-franchise businesses as most MG dealers disappeared after the demise of MG Rover.

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