MG-force to be reckoned with

By ALASTAIR SLOANE

The MG Rover group has turned its MG TF soft-top sports car into a modern-day expression of the MGB GT from the 1960s, and industry analysts believe it will go into production now that the struggling British company is poised to get $2.6 billion from a joint venture deal with China's biggest carmaker.

Shanghai Automotive Industry Corporation is expected to win approval from the Chinese Government early in the New Year to sign off on the deal, which would see SAIC hold a controlling 70 per cent of the new company and MG Rover 30 per cent.

John Towers, chairman of MG Rover's parent group Phoenix Venture Holdings, said the future of the company rested on the deal and he was confident it would be sealed.

The manufacturing venture would develop and produce cars in China and Britain and was expected to make one million cars a year, said MG Rover spokesman Daniel Ward.

It would also provide crucial liquidity for the last British-owned volume carmaker (which celebrated its centenary this year) and secure 6100 jobs at its Longbridge, Oxfordshire, plant.

Ward said the $2.6 billion figure reflected estimates of what it would cost to develop a new range of models, the first of which would be a replacement for the Rover 45 due in 2006.

A new small car, a large executive model and a new sports car were set to follow.

"The plan would be to build all the core models in both locations," Ward said, with the partners focusing output on models tailored to meet local demand. New models would continue to be designed in Longbridge, he said.

Analysts said there would be separate British and Chinese companies to make the new models, but key assets and intellectual property rights would be contained in the venture, giving SAIC effective control.

The deal, should it go through, gives ambitious SAIC a solid base in Europe and would open a major beachhead for Chinese carmakers seeking to broaden their reach, even though Ward said SAIC was unlikely to export to Europe small cars it makes for the domestic market.

Rumours about a tie-up have circulated since June, when SAIC and Rover said they had signed a co-operation agreement.

SAIC is one of China's largest and most profitable carmakers and sold 600,000 cars last year, more than four times the number sold by MG Rover.

It aims to become one of the world's top six carmakers by 2010 and has said it wants to list its stock overseas to raise a reported $2.8 billion.

It is already the main Chinese partner of both General Motors and Volkswagen and last month agreed to buy control of South Korea's Ssangyong Motor Co. Ssangyong vehicles are brought into New Zealand through Rapson Holdings, a company owned by Russell Burling, the former Daewoo importer.

SAIC is also one of a group of investors, including GM and Suzuki, that owns the GM Daewoo joint venture in South Korea.

MG Rover is the company left behind by BMW in 2000, when the German car company sold off the remnants to British investment group Phoenix Venture Holdings for £10 ($26).

It has been struggling to break even since. Sales in New Zealand of its models have been slow. Andrew Bayliss, general manager of MG Rover New Zealand, is leaving the company to take up a new position in the motor industry outside of Auckland.

Bayliss was originally employed by Christchurch-based investor John Fairhall to negotiate with the factory in Britain for distribution rights for MG Rover in New Zealand after BMW sold the company.

"I've enjoyed my time at MG Rover NZ, and believe the brand has a bright future in the niche prestige market here," said Bayliss.

The MG GT Coupe is believed to be the new sports car in the model replacement mix from 2006. Another design concept, the Rover 75 Coupe - a two door based on the 75 sedan - is expected to bolster the executive ranks.

The MGB GT coupe is powered by a 2.5-litre V6 engine, a reworked Rover K-series unit producing 148kW (200bhp) for a zero to 100km/h sprint of under six seconds and is capable of a top speed of around 230km/h (140mph).

The car sits on 17-inch alloy wheels, and an extended front aero splitter is balanced by a longer tail-spoiler integrated into the bootlid to reduce lift at speed.

The absence of door handles also helps reduce drag, says the company. Instead, the doors open electronically via the key.

Production of the original 1.8-litre four-cylinder MGB GT began in 1965. The factory made 128,212 before the car was discontinued in 1976. Included in that number were more powerful models: the 3-litre straight-six MGC and 3.5-litre V8 MGB GT.

MG Rover says the 75 Coupe is the latest in a line of renowned Rover designs such as the (1949) P4, the (1960) P5 coupe, the (1964) P6 2000 model and the (1976) SD1 hatchback.

Rover design director Peter Stevens is enjoying his trip down memory lane: "I want people to turn away for a moment from postmodern brutalism and to enjoy the elegant and timeless lines of the 75 Coupe's design.

"The true character of a Rover comes from its ability to present a cosseting environment with comfort and refinement being the high priorities - elements that should be expressed in the form and detailing of the exterior of the car.

"Heritage is a great strength for a marque as it gives you the terms of reference and something to build on for the future. That is exactly how we saw the challenge of presenting a Rover concept in its centenary year."

MG Rover says the 75 Coupe could come in front-and rear-drive derivatives. The front-drive model would most likely use a V6 drivetrain and the rear-drive a V8. A 290kW (385bhp) supercharged V8 unit would also be available.