[Guest]

March 25, 2002


MG Rover to develop cars, engines with Chinese firm


Mark Rechtin
Automotive News Europe

MG Rover will develop the replacements for the Rover 45 and 25 with Chinese automaker China Brilliance.

The two companies have formed an alliance to share financing, engineering and manufacturing of future vehicles.

The 45 is due in early 2004, followed by the 25 in late 2005.

The two companies will also work together to develop new engines to replace MG Rover's aging K-Series range.

MG Rover and China Brilliance have divided global sales territories. MG Rover will continue selling in Europe. China Brilliance will sell in China, Africa and most of Asia, and will rebadge MG Rover models for those markets.

Neither company sells in the USA, so any future launch there may be a joint venture.

"China is the world's fastest growing market for cars," MG Rover CEO Kevin Howe said in a statement. "The alliance can move quickly into a position where it can fully exploit China's potential."

John Lawson, analyst with Schroeder Salomon Smith Barney in London, warned that linking with a Chinese automaker might not be the best solution.

"The China auto business is in a state of considerable flux," he said.

China's membership in the World Trade Organization will open the market, he said.

"The existing manufacturers have to deal with imports and try to upgrade the offerings they have," Lawson added. "That has an impact on their pricing and the potential competitiveness."

But a major British union leader welcomed the agreement.

"This gives MG Rover a better opportunity of surviving than they had yesterday," said Tony Woodley, national secretary of the Transport and General Workers Union in London.

MG Rover and China Brilliance stated that the alliance is not a merger, and that no equity exchange will occur.

 

[cerbman]

As long as ownership of MGR stays 100% UK, I won't mind, I would rather MGR have an alliance with a Chinese company than be taken over by the likes of Ford, or anyone else for that matter.

 

[Guest]

Here's another release from the Observer

OBSERVER: Brilliant! OBSERVER COLUMN - Financial Times; Mar 22, 2002

Brilliant!

It is exactly two years since the marriage between auto groups MG Rover and *** hit the rocks. And both have apparently decided that the time has come to take new partners.

Kevin Howe, chief executive of the reborn Rover business, yesterday announced that his company had agreed to climb into bed with China Brilliance of Shanghai.

MG Rover has just one factory in the UK Midlands. Brilliance makes minibuses, sedans, pick-up trucks and London cabs in China.

But Howe courteously - if a little obscurely - remarked that he was "delighted that we have so much in common". He hoped the alliance would "move quickly into a position where it can fully exploit this market's potential".

Sound familiar? It is. Joachim Milberg, chairman of ***, announced recently that the German carmaker had agreed a joint venture with . . . China Brilliance. Perhaps the company should erect some Chinese walls.