SAIC and Nanjing Merge to form Mega Chinese Auto Group

Industry analysts widely agree that one of the principal factors preventing Chinese automakers from succeeding outside of China is the local industry’s fragmentation, with over 100 automakers vying for their slice of the proverbial pie. However, a merger announced Wednesday between two major Chinese automakers, Shanghai Automotive Industrial Corp (SAIC) and Nanjing Automotive Group, stands a stronger chance of succeeding in the international car market as a larger group.The merger, which has been long anticipated, involves SAIC paying $285.7 million for Nanjing. In return, Nanjing’s parent company acquires 4.9 percent of SAIC Motor Corp.

The products of SAIC’s joint ventures with GM and Volkswagen Group account for 14% of the domestic market in China, selling 1.25 million vehicles in the first ten months of 2007. Nanjing, meanwhile, sold less than 80,000 over the same period, making the acquisition a merger in the same sense as Mercedes had “merged” with Chrysler. Nanjing, however, owns MG Rover, whose plants in England SAIC hopes to use as a foothold into the European market.

MG TF Re-Launch Delayed

Nanjing MGTF According to reports by the Birmingham Post, the much-vaunted re-launch of the MG TF Roadster will be put back until sometime in 2008. It has stated that as well as there being little likelihood of the MG 7-Series saloon reaching the UK until next year, but also, ‘Nanjing Automobile missed its end of the 2007 year target for the launch of its MG TF sports cars.’

NAC-MG was aiming for an April relaunch, to coincide with the parent company’s 60th anniversary, but following the Longbridge re-opening ceremony in May where company executives were talking about an ‘Autumn launch’, it now appears that TF will now go to the showrooms in the UK in 2008.

Final details are being worked out on pricing for the car, although reports in China suggest it could be around £20,000. Around 31 dealers have signed up so far to sell the car with more expected to follow. Meanwhile a marketing campaign is expected to start in early 2008 to alert MG enthusiasts and other potential purchasers to the relaunch of the car.

Eleanor de la Haye, spokeswoman for NAC MG, said: “The car will be released to dealers in February and deliveries will start in March..” According to the Birmingham Post, 20 cars are currently on test for altitude testing in Spain, hot weather testing in Australia, and cold weather testing in Finland.