[MGROVERnut]

According to Autocar MGR have sold MG to the Chinese. The 25 will be moving to China, the 75 will be made here (but a stretched version will be made over there). Longbridge will either get the new 45 or the new 25 but not both. The part of the Longbridge site which makes bodyshells will be redeveloped (doesn't say into what). However Autocar believe the deal is good because it will safeguard Longbridge and both marques. The Chinese are also extremely commited to making Longbridge pay! (a good thing I think). Oh and MGR get 30% of the total venture, but a UK managerial team (including Kevin Howe) should remain and get beefed up with high profile appointments as non exec directors. I've probably missed some stuff off but I'm at work, so I'm unable to do much better. Anyone able to expand on my summary for those without a copy?

 

[David Lee Newsham]

I read about this last night on an International motoring website, although I can't seem to find the site now.....

From what I can remember, SAIC have agreed to licence the MG brand from Phoenix Venture Holdings originally they only wanted the Rover marque this will provide substantial extra funds to MGR (UK).

The Body Assembly Plant is to be receive invenstment, the plant which is the largest in Europe will be deloped so that it can be more flexible in the number of models it produces.

Finally the 'Phoenix Four' will all remain involved in the new Joint Venture however they will be Non-Executive Directors.

I'll try and find the site again and post a link.

 

[Steve McF]

But MGR retain control of the MG marque, and still get to use it themselves??

Will BMW still retain control of the Rover marque? And does that mean those b*****ds will still get royalties???!!

 

[preetoo]

But MGR retain control of the MG marque, and still get to use it themselves??

Will BMW still retain control of the Rover marque? And does that mean those b*****ds will still get royalties???!!

Until we know the full scale of the deal we don't really know who's got control of what. I'd hate to think that BMW will still have control of the Rover name, but given SAIC's control of Ssangyong and the 4x4's they are currently producing and developing, Ford may exert some pressure on Helmut Panke and the BMW board to restrict what can be done with the Rover name if it causes confusion with Land Rover.

I must admit I'm getting a bit weary of the constant speculation, press reports and associated conjecture. I'm hoping it'll all be worth it in the end, but we need the facts of this deal (or deals) established sooner rather than later. My calender in the kitchen as a red ring marked round April 20. They better not let this deadline slip or the press will have a field day.

 

[haudit23]

Are we talking about PVH having sold MG lock, stock and barrel to SAIC? Or is it more likely we're talking about a licensing agreement giving SAIC the rights to use the brand name outside of Western Europe and other territories where PVH sell MG's and Rover cars?

I'm firmly of the opinion that PVH and MGR aren't actually selling ANYTHING outright to the Chinese - they may be licensing intellectual property and production rights, but I don't think they're stupid enough to sell them off wholesale, otherwise they'd have very little leverage in the joint venture.

If SAIC are to use the MG brand outside MG Rover's sales territories, then surely this will mean an additional payment on top of the initial £200 million investment already talked about in the press. If SAIC thinks it's going to get the rights to manufacture MG Rover's cars and have the rights to both brand names for as little as £200 million, then they really are shockingly naive.

 

[Truebrit]

We need to remember that there are TWO Joint Ventures not one.

MGR as we know it at present, will of course have 30% of the Chinese JV.
The crunch question is, what percentage of the British-end JV will the Chinese have?
I suspect that they may well have 51% and they will therefore control the activities and investment/models at Longbridge.
PVH is not MGR - the intellectual property rights being transfered or licenced to SAIC are probably owned by PVH not MGR.
There's a distinct possibility that MGR will disappear altogether as a separate company, being absorbed into the British-end JV.

 

[heliman]

Are we talking about PVH having sold MG lock, stock and barrel to SAIC? Or is it more likely we're talking about a licensing agreement giving SAIC the rights to use the brand name outside of Western Europe and other territories where PVH sell MG's and Rover cars?

I'm firmly of the opinion that PVH and MGR aren't actually selling ANYTHING outright to the Chinese - they may be licensing intellectual property and production rights, but I don't think they're stupid enough to sell them off wholesale, otherwise they'd have very little leverage in the joint venture.

If SAIC are to use the MG brand outside MG Rover's sales territories, then surely this will mean an additional payment on top of the initial £200 million investment already talked about in the press. If SAIC thinks it's going to get the rights to manufacture MG Rover's cars and have the rights to both brand names for as little as £200 million, then they really are shockingly naive.

Agree!!! I think that it is likely that they have sold a licence or joint ownership of the interlectual property rights (current products) to SAIC so that they can establish the brands in China. The rights for any new metal will probably be owned by the JV company. It sounds to me that the way in which MGR currently operate probably won't change a great deal but there development engineers will work for the JV and MGR. I know that this whole deal is seen as a takeover but if seen rationally is it any different than the deal that MGR had with Honda?, other than this time MGR/PVH have actual ownership rights via the JV of the car designs and would probably be free to alter anything they like to suit their markets. I mean, how hard is it for the press (INCLUDING AUTOCAR!!!) to grasp the concept of a Joint Venture. It's fairly simple; 1) New Company 2) SAIC provide the cash 3) MGR design the cars 4) Both companies build what they want from the JV portfollio (and their own stuff outside the JV) 5) Share the profits. Purely my interpretation of all the stories about the deal (no insider info unfortunatley), I like most others on here have a brain!!

 

[Diesel45]

I mean, how hard is it for the press (INCLUDING AUTOCAR!!!) to grasp the concept of a Joint Venture. It's fairly simple; 1) New Company 2) SAIC provide the cash 3) MGR design the cars 4) Both companies build what they want from the JV portfollio (and their own stuff outside the JV) 5) Share the profits. Purely my interpretation of all the stories about the deal (no insider info unfortunatley), I like most others on here have a brain!!

As nobody actually knows what is going on then the press only guess the same as the rest of us. I particularly despise the press and avoid reading the press and I disbelieve everything in there. But I know from experience that when deals like this are going on, where there is public interest, the reality can be dressed up in such a way to reduce controversy and minimise any obstacles. The joint venture phrase can be used to make what is actually a takeover appear easier to swallow. I personally believe that there won't be much left as wholly owned British, the companies and marques will all be thrown into the JV pot. Phoenix Holdings will remain but MGR will not.

In these situations barefaced lies will be told to keep people happy. I've seen it before.

 

[Truebrit]

Sorry Heliman but if you still think there is only one JV, then I'm afraid you're in for a bit of a shock.

 

[Mike]

When Autocar say MG has been sold to the Chinese, they do say it as 'sold' in inverted commas, i.e. not really sold.

They claim that 25/ZR production at Longbridge will cease at the end of this year, and move to China, and that the 75 and the current 45 will remain at Longbridge. China will also build 75s and it seems be the only place from where stretched 75s will be sourced, though I don't see why that should be.

And.....MGR get to keep control of the CityRover and the SV, so things are looking up! So 75 apart, Longbridge looks after the really big sellers - the 45, SV and CR. Yes that was sarcasm.

How will they keep busy until the new model comes on stream?

 

[Adrian Robertsh]

The story is based on a trip to China that SAIC organised for UK journos including one from Autocar. SAIC ARE buying the mg name AND will license it back to Pheonix for the TF and SV. Pheonix keep the CR/TF/SV. EVERYTHING else goes to the JV. The Chinese 75 will be a lengthened wheelbase, but NOT the longwheelbase version MGR build here.

 

[heliman]

As nobody actually knows what is going on then the press only guess the same as the rest of us. I particularly despise the press and avoid reading the press and I disbelieve everything in there. But I know from experience that when deals like this are going on, where there is public interest, the reality can be dressed up in such a way to reduce controversy and minimise any obstacles. The joint venture phrase can be used to make what is actually a takeover appear easier to swallow. I personally believe that there won't be much left as wholly owned British, the companies and marques will all be thrown into the JV pot. Phoenix Holdings will remain but MGR will not.

In these situations barefaced lies will be told to keep people happy. I've seen it before.

Ah haaa!!! So in that case SAIC is owned by GM and VW????

 

[Windy]

The story is based on a trip to China that SAIC organised for UK journos including one from Autocar. SAIC ARE buying the mg name AND will license it back to Pheonix for the TF and SV. Pheonix keep the CR/TF/SV. EVERYTHING else goes to the JV. The Chinese 75 will be a lengthened wheelbase, but NOT the longwheelbase version MGR build here.

Did you mean that SAIC are buying the MG name or that the JV is buying the MG name.

Seems a bit odd that MG would become entirely Chinese and you havent allowed for an MG ZR or ZS in that statement.

 

[RichardPhillips]

I think what we've established here is that *nobody* knows what is going on.

 

[Windy]

That is probably the plan - cause as much confusion as possible - good for publicity!

To add to the confusion I have just been reading about the updated L-Series going to India:
http://www.austin-rover.co.uk/news0305f.htm#20mar

 

[Guest]

After speaking to a friend who will know, the "MG" brand has not been sold instead a licencing agreement has/will be set up in the same way as the "ROVER" brand name.

Also there will be ONE joint venture company with SAIC remaining independant and PVH (and MG Rover which it owns) remaining independant.

 

[Guest]

We must wait and see. The Phoenix 4 received everything for £10 just 5 years ago (and the business is in a much worser condition now). The Chinese will know what they are doing, and they will know all the facts better as we do.

**Atmos the emboldened statement is pure bull******

 

[Adrian Robertsh]

Ok, the MG name is reported as going to the JV, but the JV board will reflect the percentage shareholding of each partner. IOW SAIC will have voting control. I personally think the JV 'spin' is a way of trying to keep the British end happy. ALL the 25 production is going to China, I cannot remember exactly what was written about ZR/ZS but I think the article says ZS stays in the UK until the 'Nexus' (RD60 as was) comes along IF sales hold up.........The date is still set for 20 April for official announcement but I wouldn't be surprised if Hm Gov pursuade SAIC to delay until AFTER the election as I suspect the announcement will not be all that positively received in those constituancies that will suffer the redundancies. As long as a midrange MG badged hatch/estate is still made in the UK I will be a potential customer.

 

[Ben25]

I wrote to the MG-Rover press office about the damage all the speculation is, and will continue to cause back in December. My point to them at the time was that an awful lot of people in this country actually support the company and what it is trying to do because it is British first and everything else second. Selling anything off to SAIC or the joint venture firm would be pretty foolish as at present it is only the die hards who are buying the cars anyway and without us it would be even worse.

I got an encouraging reply which led me to believe that neither Longbridge or the brands will be sold. The joint venture is about developing new models where MGR put in what they have in the way of designs and technology and the Chinese bring the money to make them actual finished designs. Although the reply was sketchy on detail- as it had to be given the deal wasn't finalised- I definitely felt that the plan was to continue making all the models here, for UK and European markets, and SAIC will build them over there for the far eastern markets.

If we are to be expected to believe that MG has been sold, the technology has been sold, less money is coming than initially suggested, BMW will still have a say in what happens with the Rover brand whilst knowing that everything can be made in China for a fraction of the cost it can here then Peter Stephens and his design team may as well start looking for accomodation in Shanghai because that will be all that is left. I don't believe that most of these whispers are even half true and am looking for MGR and SAIC to get this deal done and bring an end to this speculation once and for all. I expect there to be a deep collaboration between them but I fully expect MGR to continue (and will be gutted if they don't) making pretty well the full range- hopefully one day including a proper small car- and I expect the announcement of the deal to be coupled with some hard news about when we can expect RD60 to appear at a dealer near you. If what we have heard about this model is true then the only thing holding it up is the completion of the joint venture and if I were running the company I would want to unveil my new model on the day the whole world is watching. I just hope they can deliver.

My final comment on all this is about the Phoenix four. I don't know much about them, but I do remember that when they stepped in to buy MGR for that now infamous tenner they made the point that unlike the other bloke who wanted to close most of the business and build the MGF, they were car people, and West Midlands people and saving the firm as a whole mattered to them. If this is true I would be surprised if five years on they have transformed themselves into asset strippers who will sell out everything for a few quid. Sure, they have made mistakes, we all know that, but I still hope that they remember what really matters in all this. Maybe some of you know them, or know about them and they are just venture capitalists, but I will reserve my judgement on them until I know what the deal is.

 

[Ian]

For those that haven't read or got access to Autocar - here is the full story.

MG SOLD TO CHINA
Autocar - 22 March 2005

The MG Marque has been unexpectedly sold off as part of MG Rover's joint-venture deal with Chinese car maker SAIC, Autocar can reveal.

The long-anticipated deal between the two companies had originally revolved around the Rover brand, outright purchase of the K-series engine family and Rover 25 and rights to produce the 75.

But Autocar has leartn that the MG brand has now been thrown into the deal. This means that a board dominated by SAIC will control the future of the famous marque. MG now accounts for a substantial chunk of MGR's total sales in Europe, making it crucial to the survival of the European sales network.

More seriously, an agreement to build the vital new medium car at Longbridge is still not sealed. But SAIC is said to be very keen that the new Longbridge operation will be solidly profitable.

Well-placed insiders told Autocar that Phoenix Venture Holdings - the company that controls MGR - is being propped up by cash injections from SAIC as the core carmaking business struggles to survive on a day-to-day basis. At the end of last year SAIC paid over around £65m for the ownership of the K-series engine and the Rover 25.

In the past few weeks SAIC has stumped up another £80m or so t buy the rights to build the Rover 75 and for ownership of the MG badge. It's thought the Phoenix share of the joint venture is now around 25 per cent, which the other 75 per cent held by SAIC (and minority partner Nanjing Auto).

Production of the Rover 25/MG ZR is due to end in the UK later this year, before the operation is moved to a new site north of Shanghai. The K-series engine manufacturing operation will be shipped out next year, building engines ranging from 1.1 litres to a new 2.0 litres unit as well as the 2.5 KV6. The revamped L-series diesel engine will continue to be made in the UK.

The 75 production line will be split, with China building a moderately stretched version of the 75, while Longbridge sticks with the standard and long-wheelbase 75s. 45s and ZSs will also continue to be made in the UK until the car is phased out.

MGR's factory site is also being redeveloped, with the old West Works site that makes bodyshells for the 25 and 45 due to be closed in early 2006.

Phoenix Venture Holdings will be left with the ownership of the TF roadster, the SV supercar, MG Sport and Racing and he deal to import the CityRover from Indian maker Tata. It will aos be responsible for the pension fund and redundancy cover for MGR's workforce. Ironically, it will have to lease back the right to use the MG badge.