BEIJING - Nanjing Automobile Group is racing ahead with plans to build cars based on MG Rover designs despite a continuing battle with SAIC Motor Co. over which owns the intellectual property rights. Both are Chinese companies.
In 2007, Nanjing plans to build 13,000 cars based on the Rover 75 sedan and 7,000 convertibles based on the MG TF.
Most of Nanjing's Rover 75-based cars will be sedans called the MG 7. But there also will be some station wagons called the MG 7T.
Nanjing plans to start production in March 2007. It intends to build the MG 7 both in China and at the former MG Rover factory in Longbridge, England. The sports car will be assembled in China and sold in China and Great Britain, a supplier source says.
By 2011, Nanjing aims to be assembling 85,000 MG 7s and 25,000 MG TFs.
Nanjing will source as many parts as possible in China for both models to keep costs down, the supplier says.
Nanjing is seeking price quotes from suppliers in China, including many that already make parts for a version of the Rover 75 that will be assembled by SAIC Motor Co., a subsidiary of Shanghai Automotive Industries Corp.
In 2004, SAIC bought the intellectual property rights to the Rover 75 and 25 models, plus several engine families from British automaker MG Rover. SAIC hoped to buy Powertrain Ltd., MG Rover's engine production subsidiary, at a bargain price after MG Rover filed for bankruptcy. But British bankruptcy administrators instead chose Nanjing as the purchaser.
SAIC sources say the agreement under which SAIC purchased the intellectual property rights of the 75 has loopholes that allow Nanjing to make the sedan, too.
That means there could be two copies of the Rover 75 on Chinese roads in a few years.
As early as 2001, Shanghai Automotive wanted to buy the much smaller Nanjing to gain manufacturing capacity. But the government of Jiangsu province, part owner of Nanjing, did not want give up the automotive manufacturer. Nanjing attracted investors and told of plans to triple sales and expand its capacity, blocking SAIC's plans.
Industry insiders say Nanjing and SAIC eventually will be forced to cooperate in building Rover-based cars. Indeed, the Chinese government already has told the two to work things out, say sources close to both companies.
Many in the industry doubt Nanjing can achieve its ambitious production plans alone.
MG Rover's Longbridge plant closed last April after the financially troubled British carmaker collapsed. Nanjing bought MG Rover's assets last July for £54 million, or about $94.8 million at current exchange rates.