Chinese giant goes west with MG

CHINA’S biggest car-maker has begun its long-anticipated assault on western markets via the born-again British brand MG, rolling out its first Shanghai-built right-hand-drive MG6 sedans and liftbacks in New Zealand and South Africa ahead of their likely introduction to Australia.

Shanghai Automotive Industry Corporation (SAIC) – the main Chinese partner of the world’s two biggest motor companies, General Motors and Volkswagen – is also sending semi-knocked-down MG6 kits to Britain where they are being assembled at MG’s historic Longbridge plant in Birmingham for European consumption.

GoAuto understands the state-owned SAIC has already signed an MG distribution deal for Australia, although the company said to be involved has declined to comment, saying it would be premature.

We also understand another of China’s other premier brands is just weeks away from announcing a presence in Australia where nine smaller Chinese companies have already nailed up their shingle via five independent distributors.

In New Zealand, eight MG6 liftbacks and sedans have just arrived in Auckland to be employed as dealer demonstrators and test cars ahead of the late February retail rollout of MG by importers British Motor Distributors (BMD) – a branch of John Fairhall’s Archibald Motor Group that sells a wide range of European luxury cars such as Audi, Porsche, Jaguar, Land Rover and Volvo in NZ.

From top: MG6, MG5 concept, MG3.

The arrival of the first batch of MG cars was confirmed by BMD operations manager Kerry Cheyne, who said NZ would be the second market behind South Africa to get the completely-built-up RHD MGs from the Chinese plant.

SAIC is the biggest of the ‘big four’ Chinese car manufacturers in the world’s biggest motor market, making 3.64 million cars in China last year, mostly in partnership with GM under the Buick, Chevrolet and domestic Wuling brands, and VW.

While the Shanghai-based company has been preoccupied with meeting the huge domestic demand for cars to date, it has now started to look outside China for further growth with its own brand, MG.

SAIC acquired the venerable British brand when it merged in 2007 with another Chinese motor company, Nanjing Automobile, which snapped up the rights to MG Rover assets – including tooling for cars such as the Rover 75 – when the UK company went into receivership in 2005.

Originally called Morris Garages and founded in the 1920s, MG was best known for its open-top sportscars, most recently the TF that is still in production in fits and starts in the UK under the new Chinese ownership.

In China, SAIC has been reinventing MG as a supplier of sporty hatches and sedans, all powered by four-cylinder engines.

The mid-sized MG6 – in GT liftback and Magnette sedan body styles that last year scored an official four-star Euro NCAP safety rating ahead of the UK release – is set to be followed by the Toyota Yaris-sized MG3 and Corolla-sized MG5, each in a range of variants.

While the MG3 has already arrived on the Chinese market in left-hand-drive format, the production version of the MG5 is expected to surface at the Beijing motor show in April.

For now, the export focus is on the MG6 mid-sizer, which in China is powered by a 1.8-litre petrol engine in normally aspirated 99kW and turbocharged 118kW guises, both mated with a manual gearbox.

Export markets such as New Zealand and South Africa get only the turbocharged engine, which is expected to be joined by a 1.9-litre turbo-diesel later this year, along with a dual-clutch transmission.

Much of the development work on the new-generation MG cars is still done in Britain, with most of the manufacturing done in China alongside SAIC’s Rover-based luxury range, Roewe.

The Roewe name is a substitute for Rover because BMW owned the original nametag when it bought Land Rover before selling it to India’s Tata.

According to Chinese reports, Roewe is destined to remain a Chinese domestic brand, with MG spearheading the export drive thanks to its broad market recognition and cache in the west.

The decision by SAIC to start growing its export base comes as the breakneck sales growth in China slows, as the central government tightens the screws to bring it back to a more sustainable level.

SAIC’s smaller domestic rivals, such as Great Wall, Chery and Geely, have already established a wide international presence, partly because of the withering competition within China from the likes of SAIC with their powerful and sophisticated overseas partners.

Mr Cheyne said that contrary to many reports, the fresh Chinese-made MG cars such as the MG3 and MG5 are all-new and not based on old Rover platforms.

He said the focus would be on three models – first MG6 and later the 1.5-litre MG3 and 1.8-litre MG5.

“We have been working on it for a long time, and we are really excited about it,” he said, adding that BMD had been working on the distribution deal for six years.

“We still support the market for MG and Rover parts, and we have been working with Nanjing and SAIC for that amount of time.

“We have never ditched the loyal owners of MG and Rovers cars, and we see a lot of value in the MG marque – it has good backing, it is an excellent product.

“From what I saw the other day, they are brilliant – totally up there.”

Although sales of the MG6 thus far are reported to be disappointing in the UK, the British MG distributor is about to step up the promotion of the new model with the appointment of Britain’s leading touring car team, Triple 8, to enter an official MG team in the 2011 British Touring Car Championship series with drivers headed by two-time champion Jason Plato.

Triple 8 is the same British-owned outfit that fields the Vodafone Holden team of reigning champion Jamie Whincup and Craig Lowndes in Australian V8 Supercars.

So far, no new-generation MG cars have been given Australian design rule (ADR) approval, although the fact that they have made the grade in Europe would seem to make that a formality.

For Australian manufacturers facing tough times, the arrival in right-hand-drive markets of a company the size and power of the SAIC will be pause for thought, as it marks a potential major lift in Chinese motor market intensity in Australia.

Where SAIC goes, other major Chinese car-makers such as Beijing Automotive Industry Holding Company (BAIC), Changan Automobile Group and FAW Group, are likely to follow.

Chinese brands either already on the Australian market or with plans to enter soon are Great Wall Motors, Chery, Geely, ZX Auto, Foton, Higer Bus, JAC, Joylong and EDay.