TMCnet News
CHINESE SNUB FOR MG ROVER(Sunday Mercury Via Thomson Dialog NewsEdge)THE future of Long-bridge looks even bleaker after the Chinese Government dramatically stopped its new owners beginning mass production. Communist leaders in Beijing are said to have attacked the Nanjing Automobile Group (NAG) over their 'over-ambitious' plans. This is also believed to have led to the postponement of a much vaunted foundation-laying ceremony for a huge new car plant in Nanjing. Experts in China have predicted that the Chinese car market could suffer because of NAG's expansion plans - and the Government is now putting pressure on the company to think again. Disaster NAG wants to produce upmarket passenger cars in China based on MG Rover designs which it acquired last year. It has also promised to re-start production at the abandoned Longbridge plants - claims which have been rubbished by experts. Tackling over-capacity in the car industry in China is so serious that the Communist Party has made it one of its major targets for 2006. The Beijing Government has also been very critical of its local governments for promoting projects, like NAG's, for political purposes and wasting large sums of public money. But NAG president, Wang Haoliang, insists his firm WILL build the new plant in Nanjing to make 200,000 passenger cars, 250,000 engines and 100,000 gearboxes per year. Production was due to begin in the first half of 2007. Wang previously admitted: "People say that our purchase of MG Rover is like a snake eating an elephant - it fattens the stomach and makes you very happy, then turns to disaster in two years. "Yes, it is a high-risk strategy and severe test for us. We were not the strongest among the Chinese bidders for MG Rover." But car industry expert Garel Rhys is unimpressed with NAG's 'posturing'. He said: "The logic of production at Longbridge seems to be diminishing by the minute. NAG have clearly bitten off more then they can chew." Professor Rhys, of Cardiff University Business School, is convinced the future is bleak for Longbridge. He said: "It is clear the Chinese don't have the ability to design, develop and promote products all the way to the market place, so they rely on foreign firms like MG Rover. "To expect NAG to become a fully fledged car making company overnight is very unrealistic. "This process can take decades and these latest delays in China prove that to be the case. "I'll believe production will re-start at Longbridge when I see it. The longer they can't get their act together in China the less I believe anything will happen in Birmingham." [email protected] |