Saturday's paper had a huge and pretty fair write-up about NAC, the MG7 and Chinese driving. It was the main Motoring story:
SOURCE: Daily Telegraph
"Beijing on Wheels" (driving in China)
SOURCE: Daily Telegraph
"Driving the first MG"Andrew English reports on the fate of MG Rover, and drives the first Chinese-built 'Modern Gentleman'
# Beijing on wheels
# Our man in Nanjing...
# Driving the first Chinese MG
In a written parliamentary answer last month, Margaret Hodge, Minister of State at the Department of Trade and Industry, admitted that so far, the two-year, ongoing inquiry into the collapse of MG Rover has cost £8.1 million. In fact, the inquiry, headed by Gervase McGregor of BDO Stoy Hayward, has cost so much that some of the DTI's science budget has had to be diverted to pay for it. And there is no publication date in sight.
Andrew English with the new MG
A bit of English in the Far East: Andrew with the new MG7 outside the MG plant in Nanjing
Crikey. What a difference that money could have made to 6,000 MG Rover workers whose redundancy payments are estimated (by the MG Rover Task Force) to total about £40 million. Likewise, the administration fees for PricewaterhouseCoopers (PwC), which totalled £6.6 million in the first six months alone, and KPMG's fees for advising the Government, and Deloitte's auditing fees for work on Phoenix Venture Holding's labyrinth of companies.
And what will we learn from the inquiry, from which the DTI distances itself by calling it a "Companies Act inspection"? That four greedy businessmen made millions out of selling the business but cunningly retaining the property, and furnishing themselves with a pension scheme worth millions? That in April 2005, when the MG Rover line finally clanked to a halt, after a century of car production at Longbridge and 81 years of MG history, the Government was powerless to save it? That this was the final act in the agonising death of what had once been one of the world's greatest car-making machines: Austin, Morris, Wolseley, and MG Rover, all discarded like used fish-and-chip paper? Or that British taxpayers always have to pick up the tab?
BMW had tried and failed to revive MG Rover, and sold it for a tenner in 2000 to the tragically misnamed Phoenix Four of John Towers, Nick Stephenson, John Edwards and Peter Beale. They ran MG Rover as a cash company for five years until BMW's £500 million dowry and the top-ups from China's largest car maker, Shanghai Automotive (SAIC), were no more. Liquidation followed and the vultures circling the offices of PwC seemed desperate to snap up everything but the pitted concrete floors of the 100-year old factory first built by Herbert Austin.
The spoils seemed at first to belong to SAIC, which had been working with MG Rover as a potential partner, bailing it out to the tune of several million pounds, and which had in its possession a two-month-old, fully fledged styling model, with the drawings and technical details on how to make it. It paid £67 million for the intellectual property rights to the Rover 75 and 25 models, only to discover that Ford had purchased the Rover name for a rumoured £10 million.
Project Kimber, a consortium headed by Lord James, looked strong with a bid of £40 million and more in the pipeline, but then China's oldest car maker, Nanjing Automobile Company (NAC), emerged from nowhere with a £53 million bid for the entire company: everything from the modern 75 production line to the hammers that bashed the MG TF sports car into shape to the office cat. With the brand names of Austin, Morris and Wolseley thrown in for good measure, it looked like the bargain of the century.
The results could be seen at last week's Shanghai Auto Show, where two very similar models stood gleaming in two show halls. If you think Nanjing's MG7 and Shanghai Automotive's Roewe 750 both bear an uncanny resemblance to the Rover 75 designed by Richard Woolley under BMW's tenure, you'd be right.
Shanghai put its Roewe 750 on sale this March, priced at yen231,000-yen276,000 (£16,500-£19,714) and plans to sell 50,000 a year. Meanwhile, Nanjing called upon what it called "the spirit of English culture" to launch its Chinese-made MG (which now stands for "Modern Gentlemen" rather than Morris Garages) with platoons of counterfeit Household Cavalry, pictures of red London buses, dancers escaped from a Gilbert and Sullivan operetta and music that ranged from Vivaldi and Beethoven to The Stranglers.
It also surprised everyone with a long-wheelbase version especially built for chauffeur-obsessed Chinese markets. "This will sell in small numbers to government departments," said Nanjing's British director of quality, Paul Stowe, who quotes a price of yen250,000-yen300,000 (£17,850-£21,428). He says the biggest problem has been explaining to the Chinese what MG is all about, as the brand has never sold cars there before - hence the excruciating launch.
Stowe has worked for Vauxhall, Land Rover and Jaguar in his time and was the last man out of MG Rover's Shanghai offices when the company collapsed. He knows where some of the bodies are buried and is considering writing a book on the subject.
The MG7 at the Shanghai Auto Show
I say, chaps: there was a cod-English theme on the NAC stand at the Shanghai Auto Show last week, where the Nanjing-built MG7 made its debut
Nanjing was formed in 1947 and built China's first light truck. It has been modestly successful with cooperative deals with Fiat and Iveco, but this is its (and China's) first attempt at building, unaided, a fully European-specification, high-tech motor car. In the £185 million, purpose-built MG plant in the Pukou region of Nanjing, it took just three months to sort, clean, repair, repaint and reassemble the old Rover production line (they decided not to bring over the 75 assembly line, as it was realised that with a simple modification, the 25/45 line could take 75 models too).
Everything came out of 5,000 shipping crates: 25,000 tons of steel, thousands of machines, 286 robots and miles of wiring spaghetti. "It was a nightmare," says Stowe. "There was no handbook and no assembly instructions, yet the Chinese built this line up in just 90 days."
Nanjing is planning to build 100,000 MG7s a year, priced at £12,000-£25,000. In addition it wants to build 100,000 versions of the old Rover 25 (badged MG3), which will be significantly updated for sale at the end of this year. There will also be an update of the Rover 45 model (badged MG5), which will go on sale in mid-2008, and the old MG TF sports car is being put into production right now, with a modest annual sales target of 12,000-15,000. The company has 30 dealers in China, but plans on 70 by the end of the year.
And where does Longbridge fit into all this? Well, it is already starting to produce the MG TF and eventually the company hopes to import MG7 and MG3 bodies and parts for assembly at the old works. Within two years it optimistically hopes to get back to MG Rover's European sales levels just prior to the liquidation, which were about 50,000 a year. There are no more than 115 employees at present, however, and Nanjing is talking about no more than 800 staff when TF production is in full swing. There was little mention of the once hot topic of building cars in Oklahoma.
We visited the Chinese plant last week and were amazed at how much love the Chinese had lavished on what is, in part, 30-year-old production machinery. The body and assembly lines are erected, but the trim shop still needs finishing and there are still myriad teething problems. The line only produces batches of 20 cars at a time and even on a Sunday, swarms of maintenance workers were busy checking robot coding instructions and transfer lines. There's little health and safety here: not a welding visor or a pair of goggles in sight. Like most Chinese companies, Nanjing tends to throw hundreds of workers at problems. "I saw people sitting on the floor with a bucket of petrol and a brush, cleaning each bolt that held the structure up," says Stowe.
"As a quality engineer I'd got a great benchmark; this car was built by BMW and my job is to make it at least as good," he adds as our test car rolls into view. Stowe drove the first car off the line on March 27. "It was a great honour," he says.
So would MG founders Cecil Kimber and William Morris have approved? "I'm not sure what they would have made of it all," he says, "but the brand struggled for most of its 80 years for lack of investment and I'm glad someone's had the foresight to invest in it. Another chapter in MG's long history has begun."
"Our Man in Nanjing" (whose name rhymes with Stall Poe and says he wants to stay another year to 18 months - and mainly talks about food) (though not cake)Driving the first Chinese MG
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Andrew English drives the first Chinese-built 'Modern Gentleman'
# Chinese take-away
Despite our initial scepticism, first impressions of the MG7 are excellent, and all the usual signs of a car's inherent production quality are good. The shut lines are straight, the paint finish is fine and the 1.8-litre turbocharged K-series engine is fitted neatly under the bonnet with no stray wires. It does seem strange, however, to see Chinese warning labels on hot pipes.
Gentleman's club: The MG7, which Andrew found to be a near-replica of the old MG Rover
During the long production break, inherent faults with the under-developed K-series have been fixed, including the overheating. The engine has been made Euro 4 compliant, strengthened internally and given a steel head gasket.
Other changes from the original MG Rover cars include LED rear lamps instead of bulbs, different wheels and a front spoiler from the sports version of the MG. In the cabin the radio/CD is a different unit, there is now a reversing camera and there are twin DVD screens in the backs of the head restraints. Under the skin, the electronics have been beefed up to cope with the extra features and the sunroof system, and the air-con units are new.
Paul Stowe says that while the units are not coming from the original suppliers, they are being sourced via Chinese subsidiaries of leading international suppliers. "They are a bit cheaper because the cost of labour is much lower in China," he says, "but the materials and design are the same, so they're of original quality."
In fact, Stowe claims that quality is actually better than the cars that came out of Longbridge. He says that in its last days, MG Rover was stripping out costs such as the bonnet insulation and driver's-side grab handles. Nanjing has put these back.
Looking carefully at the MG7, it is clear that some items, such as the flimsy rear-seat mountings, the door seals and a slight unevenness to the engine idle, are not right. Stowe acknowledges these and says there is a list of rectification items for this pre-production car. It is nevertheless a stunning achievement to have produced such a car in so short a time.
I climb behind the wheel and drive around the factory, past street names redolent of the marque's past: Birmingham, Coventry and, er, Cambr dge [sic]. There's a slightly dead-feeling throttle and the power steering groans slightly when turned at low speeds, but otherwise this is exactly as I remember the old MG Rover. The ride seems just as plush and, bumping over kerbs, the frame feels stiff.
The dashboard is immaculately built, with great shut lines and no rattles. The seats are well upholstered with smooth hides and straight contrast piping. The cabin still feels like a gentleman's club and the rear seats are just as cramped as ever they were when MGs were made in England.
There are enormous challenges involved in this venture, and many of them seem, and might yet prove, insurmountable. Nanjing is not made of money and has already asked the Chinese government for an additional £250 million. The Longbridge plans seem almost fanciful and serious car people roll their eyes when you tell them of Nanjing's proposal to ship bare car bodies 6,000 miles.
With new-vehicle sales of 7,216,000 a year, China's car market is already the world's second largest after America's. Private car ownership has doubled in three years to 20 million and is increasing fast. Yet there are bigger prizes at stake here and one is the leveraging of China's low-cost wages to sell cars back to the developed West. It's that game Nanjing is playing.
"Anyone who thinks they are not going to see Chinese cars on British roads in the next five years is living in dreamland," says Stowe. He's probably right.
NAC quality director, Paul Stowe, gives his impressions on living in China
# Chinese take-away
'There are 75 million people in Jiangsu province, with 6.5 million living in the capital Nanjing, including 2,000 foreigners, 1,600 of whom are Koreans, and the rest are Americans, Germans and Italians. I was told when I came out here with my family that I'd just doubled the English population of Nanjing," says NAC production quality director, Paul Stowe, who lives with his wife and two children on the outskirts.
Living the life: NAC quality director Paul Stowe
It's a fair city with a huge lake and a park at its centre and though the air is gritty it isn't as filthy as it is in Shanghai. "The doctors claim that if you live more than five years in one of the really dirty cities," says Stowe, "then you are starting to do serious and irreparable damage to your health."
One study by the World Health Authority estimates that because of unregulated exhausts from traffic and coal-fired power stations, cement manufacture, unmade roads and burning fuel for heat and cooking, residents of big Chinese cities are exposed to 3.5 times more particulate matter in the air than their European counterparts and suffer 15.5 times the attributable mortality rates as a result. The World Bank estimates that air pollution kills more than 178,000 Chinese people a year. In Shanghai, it's sometimes hard to see clearly across the street.
"You seldom see clear skies in this part of China," says Stowe, "perhaps one in 10 days in Nanjing, when we all go out and take photographs. I understand they'll turn the power stations off near Beijing a month before the Olympics, to clean the air up a bit."
Still, if the muck in the air doesn't get you, the roads probably will. More than 110,000 people die and 560,000 are seriously injured on China's roads each year and that figure in rising by 10 per cent annually as car numbers grow. Stowe says China is a chauffeur-driven market and when you see how people drive you can understand why. It's not just a bravery thing, either. Hit someone on a Chinese road and you'll be locked in litigation for years.
And if you've coped with the driving and the air quality, there's always the food. Sea-slug soup and duck's-foot surprise might not be to the taste of everyone, let along the average British teenager (joke: what do you call a soup made out of birds' feet and heads? Walkie Talkie). Stowe says his family has a "Chinese day" once a week, but the rest of the time they cook English food.
"Getting the ingredients isn't quite the problem you might think," he says, "but you have to make everything from scratch. The pork is a bit fatty, but it tastes good and we get our beef from Australia and our lamb from New Zealand. Eating out can be a bit depressing, especially when the restaurateur comes to the table and proudly explains that tonight's menu includes four endangered species."
The one thing the Stowes have had problems with is their daily bread, or the lack of it. "You simply can't get an English style of bread, or so we thought," he says. "It's a staple and you'd be amazed how you miss it when you can't get it. I've tried making it, but we've now found a bakery in Nanjing. It's expensive (about £1 a loaf), but worth it."
The Chinese language is another hurdle and Stowe says that while his children are picking it up well, he is struggling. "There are about four or five different tones with each word and each has a different meaning," he says.
So why stay? "It's a drug," says Stowe, who wants to stay for another year to 18 months and then write a guide about Chinese business practices. "With the MG brand," he says, "there's a sort-of 'unfinished business' side to it all, as well as the fact you learn something new every day. I love it."
# To discover more about daily life in China's easternmost city, go to Paul Stowe's blog at www.paulstowemg.blogspot.com.
"Beijing on Wheels" (driving in China)
The Chinese capital has embraced the car to the point of gridlock, says Richard Spencer, who finds patience is the key to survival
# Chinese take-away
The first test of getting a car on the road in Beijing is, well, getting the car on the road. You cannot expect cars to stop or slow to let you in. Bicycles are a hazard as well, of course: many Westerners, and I include myself, are squeamish about running them over. So you wait.
Drivers in China tend to be more forgiving because traffic is outstripping road space
In my case, I was waiting at the exit of the Lufthansa Centre car park, on the edge of the Chinese capital's third ring road. Behind me honked the horns of drivers who clearly thought I should have employed the usual method of heading straight out without stopping, looking neither to left nor to right. In front of me were four lanes of traffic, all proceeding smoothly, neither too fast or too slow, and with no break as far as the eye could see. And this was not the third ring road itself - no, this was the slip road to the third ring road. The ring road itself is a giant freeway roaring overhead.
To make matters worse, I wanted to turn left on to the ring road, while traffic here drives on the right. This meant shooting out and heading for the farthest lane, so that at the traffic lights 20 yards up the road I could turn left, go under the flyover, and turn on to the fast lane of the slip road in the other direction. From there, I could sail on to the ring road itself farther down.
The traffic lights changed to red. A chance - but no, the cars all came to a sudden halt with not a squeezable gap in between. Then I looked farther up the road, where the next set of lights had turned green. The key, I realised, was not the immediate set of traffic lights, but the next one. When they turned red, the traffic approaching these lights would start to slow, giving me the vital psychological edge in my battle to get on to the road.
It worked. A minute later, I was veering wildly across the traffic. Not a peep. I had immediately conformed to practice. Bicycles? They must have stopped for me. I guess.
Such was my sense of triumph that by the time I was on the ring road itself, heading at a leisurely pace towards lunch, I had come to the conclusion that driving in Beijing was not quite so bad after all. I smiled.
This is, according to most accounts, an unusual conclusion. Most people to whom I have spoken since coming to live here last year say driving is a nightmare. It is certainly a far cry from the popular image of an environmentalist's paradise, full of Mao-suited workers on Flying Pigeon bicycles slowly wending their way home through grey-brick alleyways.
In fact, Beijing has probably the most auto-driven City Hall of any place in the world. Its old housing has been knocked down to make way for a Los Angeles-style network of freeways, and to the second and third ring roads (there is, oddly, no first) have been added a fourth, fifth and sixth. Even in 2003, Beijingers were buying 30,000 cars every month, more than 400,000 in the year, a rise of more than 50 per cent on the year before. As they filled the streets, the streets filled - to bursting point. Traffic jams became the capital's favourite talking point. Bicycle lanes were narrowed to make way, and the government began to hold crisis meetings.
Much of this transformation had been engineered in order to make Beijing a modern city for the 2008 Olympics. Suddenly the thought occurred to the government that it might come to a complete standstill.
Why, then, is driving in Beijing easier than I had expected and, initially, found? The answer is, I think, the lack of expectations of the Beijing people. Elsewhere, including other traffic-clogged Third World capitals, people believe that the car will bring them freedom, that to swap a crowded bus or bicycle for the local joint-venture model VW Santana is to whiz glamorously between the skyscrapers to the open country beyond.
In Beijing, no one expects to get anywhere fast, and certainly no one expects freedom. Even when there is no traffic, drivers by and large stick to a medium, steady-as-she-goes pace. No one keeps to the lanes or obeys the Highway Code, of course - where do they? But nor do they screech to a halt, shout at each other and pick fights. Rather, they patiently edge out, round and behind each other, taking the shortest way from A to B. If that means travelling the wrong way down the street for 50 yards because of some hold-up, everyone understands, and the car coming the other way will slow down, honk to tell you he is there and edge round you in turn.
To watch a busy junction is to watch a slow dance to the music of car-horns. The impression of chaos is made worse by the lack of traffic light filters, the rule allowing right turns on red, and the tendency of slip roads on and off freeways to be right next to each other, causing queues to overlap. But road rage? A slight, resigned shrug more like.
Far more alarming is the actual process of being allowed to drive. I had heard all sorts of stories about this. International driving licences are not accepted, so that means taking a Chinese driving test.
Colleagues described a rather strange procedure. The applicant, after passing a medical test at a hospital, turned up at the test centre. First there used to be the practical part: three people squeezed into a car on a test track with an examiner, taking it in turns to drive 200 yards on instruction. It was, according to accounts, the easiest test in the world, though my informant managed to fail for not parking in the right place.
There was then a written test - in Chinese. Foreigners, however, were allowed "translators". My friend took a professional chauffeur, and sat back. By the time I turned up, the system had changed. No more practical test - of any sort. And the written test had thoughtfully been translated into English.
And what a test it was. My wife and I stared at the 100 multiple choice questions in disbelief. What is the correct fine for parking over a white line in China? One, two or five hundred yuan? Can an agricultural vehicle drive on the following types of road, or not? Many questions required an intimate knowledge of machinery. What is the proper pressure for an HGV hydraulic braking system?
There was a section clearly designed to test your moral fibre: for these, you had to rely on what you hoped was international do-gooding common sense. If there has been an accident, do you a) slow down so you can have a good look? b) speed up to get away as fast as possible? c) drive at a sensible, cautious speed keeping your eyes on the road?
But the final section, what to do in case of an accident, was surreal. If you come across an injured person whose innards have spilled on to the road, should you a) leave them where they are, or b) try to replace them?
Afterwards, we compared notes with some other foreigners (who all get to do their tests together). We decided we might have scored 30 or 40 per cent, if we were lucky. The pass mark was 90. We wondered whether there was some book which had all this information in it (there is, though in Chinese, it turned out).
Remarkably enough, as the results began to be handed out half an hour later, a string of 90-per-cent-exactlies emerged; my wife and me included. Half an hour, and 10 yuan (75p) later, we were on our way, driving licences in hand.
First stop was the car hire shop, where a range of locally produced Citroëns and Buicks was on offer. There was only one car for me, though, the Beijing Jeep, the local joint-venture version of the Cherokee that is the Volvo of the expat middle classes - dated, shabby, but convenient and able to cope with most things the road has to offer.
So there we were, the two of us plus children, in the Lufthansa Centre car park. Would we make it? We did, for lunch, and the next day we tried again, and went farther afield. We only got lost once on the way out of town.
And so, by Saturday lunchtime, passing observers (a couple of Chinese farmers) could stand and watch a British family in the hills beyond the Great Wall, eating a picnic by the roadside from the back of their big green Jeep.