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Nanjing Auto to use Rover technology for own brands

"[Nanjing Automobile] cannot produce anything without Shanghai Auto's approval."

Rupert Pittman, Shanghai Automotive spokesman

Nanjing Automobile Group Corp (南京汽車) said it will develop its own sedan brands using technology acquired in its takeover of MG Rover, the Chinese company's first announcement confirming it's buying the British carmaker.

Nanjing Automobile will take control of MG Rover's engine-production and assembly facilities, as well as its production and research technology, the Chinese company said in an e-mailed statement yesterday, without disclosing how much it will pay. It will also study ways of developing business in both China and the UK, it added.

Nanjing Automobile, Shanghai Automotive Industry Corp (SAIC, 上海汽車) and other Chinese automakers are acquiring or investing in overseas automakers to gain access to advanced technology and recognized brands to increase their global competitiveness.

PricewaterhouseCoopers LLP, which is administering MG Rover's bankruptcy, announced on Saturday that the automaker had been sold to Nanjing Auto. The Chinese company plans to move engine production and some automaking to China and keep an unspecified amount of vehicle production in the UK, the accounting firm said.

MG Rover, based in Longbridge, England, collapsed on April 8 with debt of ?1.4 billion (US$1.7 billion) and the loss of more than 5,000 jobs after talks to form a venture with SAIC Motor Corp failed. The company, which dates back about 100 years, employed 6,100 workers. At its peak in the 1960s, the maker of Rover sedans and MG sports cars employed 250,000 people and Longbridge was one of the biggest factories in the world.

SAIC last year bought the design rights to the Rover 25 and 75 cars and K-series engine last year for ?67 million. It doesn't own the equipment to build the engines or vehicles.

SAIC agreed last year to pay US$500 million to buy 48.9 percent of Ssangyong Motor Co, South Korea's fourth-largest automaker.

Nanjing, which makes vehicles with Fiat SpA, was founded in 1947 and has 16,000 employees and annual production capacity of about 200,000 vehicles, according to the company's Web site.

Nanjing's major products are trucks, cars and buses. The company, which makes Fiat Palio and Siena cars, posted a loss last year.

However, SAIC, which last week lost the bidding to acquire MG Rover, may block Nanjing Automobile from using Rover car designs, a spokesman said.

Nanjing may develop other sports-car models, including the Rover ZR and ZT, the Financial Times reported on Sunday.

"The company will be examining the sale process and deciding what its next move should be," Rupert Pittman, a London-based spokesman for the company, said in an interview yesterday.

Nanjing "cannot produce anything without Shanghai Auto's approval," he said.

SAIC says it submitted a higher bid for MG Rover four days before PricewaterhouseCoopers announced that the UK company's car production and engine business had been sold to Nanjing.

Shanghai Auto is considering a judicial review of the sale, Pittman said, without elaborating.
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