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Nanjing MG Motor Co, the state-owned Chinese carmaker responsible for the reborn British MG nameplate, may sell as much as a 50 per cent stake to outside investors to help fund its expansion, its general manager said.
Nanjing MG is a unit of Nanjing Automobile Group, a medium-sized
player based in eastern China that took over MG Rover in 2005 after the British carmaker collapsed, outbidding China's biggest carmaker, Shanghai Automotive, to obtain rights to the MG sports car brand.
The company this week rolled out two mid-ranged MG 7 series sedans - based on the original MGZF model - and an MG TF sports car, priced at between US$23,255 (NZ$33,000) to US$51,710. They are the first made-in-China MGs.
General manager Zhang Xin said Nanjing Auto will need US$258.5 million to US$387.8 million to increase capacity in the next several years.
"We have been in talks with several potential partners, including funds, in North America and Europe and could sell as much as 50 per cent," Zhang said.
The price of the MG cars will be beyond the reach of most Chinese, costing well over two years' salary. But Zhang said incomes in China were rising so fast that Nanjing Auto reckoned it could break even on the MG project in little more than a year and hoped for global sales of 200,000 MG-brand cars annually after five years.
Nanjing Auto is one of China's oldest vehicle makers, beginning life as a military garage in 1947. Its first attempt at vehicle production was a light truck called the "Yuejin" or "Leap Forward", a vehicle still seen on Chinese roads today. It has faced financial difficulties since the late 1990s as domestic rivals secured alliances with foreign firms such as Volkswagen, Ford, BMW and Honda and chipped away at its market share.
Now it will use the MG marque - founded in Britain in 1924 by Morris Garages owner William Morris and his sales manager Cecil Kimber - to target China's fast-growing ranks of wealthy buyers.
"We are keeping the original British flavour," said Zhang. "But in the future, the major market for MG will be in China.
"We want to create a good English car. Every component and part of the MG car will be of international quality satisfying both the Chinese and European market requirements."
MG cars built in China and at the former MG Rover plant at Longbridge in the English Midlands, which Nanjing Auto plans to restart in May, will also be sold in Europe.
Key suppliers for Nanjing's MG models include Siemens (electronics), Lear (seats), Bosch (antilock brakes), Delphi (air conditioning), ZF (chassis parts), Hyundai (airbags, steering wheel, seat belts, steering columns).
The MG 7 sedan will compete with the Roewe 750 sedan, launched in China earlier this month by SAIC Motor Corp.
SAIC bought bought the intellectual property rights to several MG Rover models - including the Rover 75 - from MG Rover before the company collapsed and was bought by Nanjing.
- Alastair Sloane and agencies.