Nanjing Automobile Group

The Nanjing Automobile (Group) Corporation (Chinese: 南京汽车集团有限公司) (Yuejin Motor Group Corporation, China's oldest car maker, founded in 1947) is a state-owned enterprise with 16,000 employees. The group occupies an area of 4,000,000 m², has fixed assets amounting to RMB 12 billion and an annual production capacity of 200,000 vehicles. The group's major products are cars, trucks, and travel buses.

History
The history of Nanjing Automobile (Group) Corporation can date back to 1947. It successfully produced the first light truck of China on March 10, 1958. The state named the truck Guerin autos and approved the establishment of Nanjing Automobile Works.

From 1958 to 1979, moved to a leading position in light auto trade in China. In 1980, in order to satisfy the need of the countryside market, it was the first to install diesel motor in the light trucks. In 1982, it introduced a whole set of moulds of Isuzu cab, which enabled them to leap to the leading position of China auto trade in terms of auto model conversion technology and the auto output to a sharp increase from 250,000 sets to 650,000 sets. During the Ninth Five-year Program, the company jointly established Nanjing Viejo Automobile Co. with Iveco Company of Fiat Auto S.p.A. of Italy. Later it introduced foreign capitals through various channels to establish Nanjing Fiat Company, initiating the production of saloon cars. At the meantime, it carried out shareholding reform on manufacturing enterprises of Yuejin autos and established Yuejin Automobile Shareholding Co., Ltd.; it introduced mature technology and auto models from Europe and established Wuxi Soyat Branch.

Currently, the company has reached an annual capacity of 200,000 sets of various autos, including over 400 kinds of saloon cars, light trucks, heavy trucks, light buses, off-road vehicles, estate cars, special vehicles and special-purpose vehicles as well as a wide series and multi-type product mix of various chassis, which has developed into four integrated production bases of Yuejin, Nanjing-Iveco, Nanjing-Fiat and Soyat.

On July 22nd 2005, the Nanjing Automobile Group purchased the British MG Rover Group for £53 million.

Brands
Car brands owned by NAC:
 * Soyat (Chinese car brand, their models are licensed by SEAT and Isuzu)
 * MG (Acquired MG Rover Group and Powertrain Ltd assets, including the brands: Wolseley, Austin, Morris, Vanden Plas (outside the US & Canada), American Austin, Princess and Sterling)

Truck brands owned by NAC:
 * Yuejin

NAC Joint Ventures:
 * Nanjing-Fiat
 * Nanjing-Iveco

Wuxi Soyat Branch
The Wuxi Soyat Branch of Nanjing Automobile (Group) Corporation is the fourth integrated production base following Yuejin, Nanjing-Iveco and Nanjing-Fiat, and the second production base of saloon cars. It locates at Wuxi, the centre of the Hangzhou-Shanghai-Nanjing triangle, covering an area of 640 m².

Soyat current model list:
 * Soyat NJ7150 (under SEAT licence)
 * Soyat Unique (under SEAT licence)
 * Soyat SUV (under Isuzu licence)
 * Soyat Pick-up (under Isuzu licence)

These models are sold inside mainland China only.

Yuejin Motor Group
Nanjing Automobile Corporation sell such automotive products as Yuejin brand series of light-duty trucks.

At present, Yuejin Motor Group possesses an annual production capacity of 200,000 vehicles of various models. The products cover different types of models, including light duty trucks, light duty buses, cross country vehicles, small-sized passenger/cargo transportation vehicles, special-purpose vehicles as well as various types of chasses etc.

Yuejin Motor Group has been engaged mainly in exploring the overseas markets of automobiles and parts & components thereof. The products have been exported to many countries and regions such as Argentina, Chile, South Africa, Sudan, Ivory Coast, Namibia, Djibouti, Tanzania, Cyprus, Togo, Italy and Spain. In addition, it has obtained successful experience in establishing abroad SKD/CKD assembly plants of trucks and minibuses.

Nanjing-Fiat & Nanjing-Iveco Joint Ventures
The 50-50 joint venture between NAC and Fiat was set up in April 1999. Located in the Jiangning District New Technology Park of Nanjing, Nanjing-Fiat produced and sold 24,000 vehicles in 2002, bringing a sales revenue of 2.3 billion yuan (US$280 million). Nanjing-FIAT produce four models: Fiat Palio, Fiat Palio Weekend, Fiat Siena, designed by IDeA and Fiat Perla the first model jointly designed by Fiat and Nanjing Fiat Automobile.

Fiat is a latecomer to the China market and showed half-year sales of 16,442 units for the first six months of 2006. The company hopes the Perla, which goes on sale in September, will help it reach total sales of 40,000 units this year, which would be an improvement of 20 percent from 2005

Iveco, an affiliate of Fiat, also has a US$300 million joint venture in co-operation with the Yuejin trucks, producing Iveco commercial vans. Iveco is the world's second biggest bus manufacturer, following only Mercedes-Benz.

MG Project by Nanjing Automobile
It is a significant step taken by NAC in its global strategy to acquire the assets of MG Rover and Powertrain Ltd. After its successful acquisition of MG Assets, NAC is now undertaking the overall planning of MG project, of which, some part is already underway for implementation.

NAC has now decided to establish production bases of MG project at Longbridge, Nanjing, and Ardmore. On one hand, the production of some products with rather high cost if produced in the U. K., such as engine, transmission and medium and low end vehicle products, will be transferred to China, where a mature supply chain with low cost will be set up step by step. On the other hand, with part of production facility retained in the UK, the original Longbridge site will be integrated to resume the production of MG TF sport car and part of high end products (including ZT and ZT-T). Meanwhile, by making full use of the prominent R & D capability and human resources in the UK as well as that of China, the Euro IV engines and a new generation of vehicles will be developed and then produced in both China and the UK in the near future. Then, the sales network of China established by NAC and the global sales network of the former MG Rover can be used to meet the demand of various markets in China, Britain, Europe and North America.

NAC is in the process of making detailed plan for the strategy implementation in the UK and China and has taken steps on some important strategic issues such as Longbridge Site integration and Euro IV engines development.

In the current plan, the production will be resumed in the Longbridge in March 2007, when MG TF, MG ZT and MG ZT-T production will resume. The first customers will take delivery during the summer.

The MG range will expand in late 2008 with the launch of two new model ranges which may also be sold as Austins. These will effectively replace the MG ZR and MG ZS ranges which Nanjing decided against continuing.

Therefore, it is a key point in the global strategic plan of NAC to re-establish a new sales network based on the original one of former MG Rover Group.

MG Production Plan
In 2007, the Naning Automobile plans to build 13,000 cars based on the Rover 75 / MG ZT lower-premium sedan. It also plans 7,000 MG TF convertible sports cars.

Nanjing's Rover 75-based cars will be mostly sedans that will be called the MG 7. Nanjing will also build some station wagons called the MG 7T. It intends to build the MG 7 in both China and at the former MG Rover factory in Longbridge, England.

By 2011, Nanjing hopes to assemble 85,000 MG 7 a year and 25,000 MG TF. Nanjing will source as many parts as possible in China for both models to keep costs down.

Nanjing is already seeking price quotes from suppliers in China, including many who are already making parts for a version of the Rover 75 that will be assembled by SAIC Motor, a subsidiary of Shanghai Automotive Industry Corporation.

SAIC sources say the agreement under which SAIC purchased the intellectual property rights of the 75 has loopholes that allow Nanjing to also make the sedan, that means there could be two copies of the Rover 75 on Chinese roads in a few years.

But industry insiders say Nanjing and SAIC will eventually be forced to co-operate in building Rover-based cars. Indeed, the Chinese government has already told the two to work things out, say sources close to both companies.

Nanjing plans to start serial production in March 2007.

The Fifth Integrated Production Base: MG Plant in China
The MG Factory of Nanjing Automobile Corporation is located in the High-level New Technology Economic Development Zone in Pukou (a new district of Nanjing). The capacity of the future Nanjing-MG Factory will reach 200,000 autos, 250,000 engines and 100,000 gear-boxes.

It is predicted that the factory, which covers 290,000 m², will have a construction time of seven to nine months with completion in 2006 with the first cars produced in 2007.

According to the purchase agreement, Nanjing Automobile has bought the MG, Austin and other British car brands, production technology and equipment for the MG ZT, MG ZS, MG ZR and MG TF and K-Series engines.

The MG series will be renamed as MG3Z, MG5Z and MG7Z, from the original MGZR, MGZS and MGZT.

The Future of the Longbridge Plant
The MG Rover plant at Longbridge was for many years one of the most important factories in Europe and was the largest British owned car manufacturing plant until the bankruptcy of the MG Rover Group. After the factory of Abingdon closed in 1980, Longbridge was also from 1982 the home of MG. Longbridge employed 16,000 ten years ago, down to 6,000 when the company collapsed into administration in April 2005.

The ownership of the site is held by the St Modwen Properties company who acquired 412 acres of the Longbridge site in two deals in 2003 and 2004 for £57.5 million and leased it back to MG Rover Group.

Shortly after Nanjing Automobile bought the company it revealed plans to employ 1,200 workers and ultimately build 100,000 cars in 2006, but apparently just 600 jobs are now likely to be created and 15,000 cars assembled at the beginning, which represents a tenth part of those originally planned. The factory is now planned to reopen in early 2007.

A 33 year deal was signed in February 2006 between NAC and St Modwen Properties covering the lease of 105 acres (a quarter of the total area of the Longbridge plant) but including the two main car assembly plants, the paint shop and administrative offices at a rent of around £1.8 million a year.

An estimated £10 million is needed to reopen the factory. The company has also encountered problems securing suppliers to make components for the MG TF the unique car it plans to build there at the moment.

The development of Euro IV engines, previously completed by Powertrain, would be carried into production, with much of the final stages now being complete. Bulking up the European end of the operation, a UK Research and Design Centre would be set up in order to develop Euro-specific models. There will also be a research and design centre in China for the development of cars for the Chinese market.

There are plans for three new model range to go on sale in late 2008, with MG and possibly also Austin badges.

MG Motors North America: Ardmore Plant
On July 12, 2006 senior officials of Nanjing Automobile Corporation announced the revival of the historic MG brand of vehicles, as well as plans to build a new MG product in Oklahoma, with the formation of MG Motors North America, Inc., in a ceremony in Oklahoma City.

MG vehicles will not only be built in Nanjing, China, but also at the Longbridge assembly plant near Birmingham, England and at a new American assembly plant to be built at the Ardmore Air Park in Ardmore, Oklahoma. Headquarters for MG sales, marketing and distribution (outside of Asia) will be located in Oklahoma City. Research and development will be in Norman at the University of Oklahoma.

NAC has recruited a seasoned American auto executive, Duke T. Hale, to be the new company’s President and Chief Executive Officer responsible for the revival of MG in the UK and Europe followed by the re-launch of MG in North America.

According to MG Motors officials, approximately 550 jobs will be created in Oklahoma, including headquarters operations, assembly operations, parts and distribution operations and research and development.

The company expects to start construction of the Ardmore assembly facility early in 2007 with production to start by the third quarter of 2008.

However, as of the beginning of 2007, there have been reports of quarreling between the Americans partners and Nanjing Auto over differences of opinion regarding MG's future. Some people speculate that the Americans are impatient with Nanjing, who seem to be more heavily favouring the existing British Longbridge factory and their own Chinese operations over the planning of the US factory. There is also believed to be extensive cultural difference between the Chinese and the Americans that are causing rifts.