July 12, 2006

China’s Nanjing to build MG cars in Oklahoma

By Poornima Gupta

DETROIT (Reuters) - China's Nanjing Automobile Group, which took control of Britain's collapsed MG Rover last year, on Wednesday said it would build MG-brand cars in Oklahoma, joining a wave of Chinese automakers looking to sell cars in the United States.

The company said it plans to assemble vehicles at three locations: in Nanjing, China, at an all-new plant, at the now-closed Longbridge assembly plant near Birmingham, England,and at a new U.S. assembly plant to be built in Ardmore, Oklahoma.

Nanjing plans to locate its headquarters for MG sales, marketing and distribution in Oklahoma City, while research and development will be done in Norman at the University of Oklahoma, it said.

Nanjing Automobile is one of several Chinese car makers, including Geely Automobile Holdings Ltd. and Chery Automotive Co., hoping to crack the global car market amid a slowdown in demand at home.

It has a small joint venture in China with Italy's Fiat, but has struggled to make headway against bigger rivals that tied up with top brands General Motors Corp.and Volkswagen AG..

The company said it plans to offer a full range of MG sports cars and sedans to consumers, including the TF roaster and the new TF Coupe.

Three sedans will be built at Nanjing's facilities in China, while the MG TF roadster will be built at the factory in Longbridge, and a newly designed TF Coupe will be built at the Oklahoma facility, the company said.

The new company, called MG Motors of North America, will create more than 500 jobs in Oklahoma, the Oklahoma Department of Commerce said.

Construction of Nanjing's Oklahoma plant is scheduled to begin early next year, with production starting by late 2008. Oklahoma put together an incentive package, which includes tax breaks, for the company to locate there.

Nanjing said capital investment would be more than $2 billion, to be funded by state and local governments in Oklahoma, the state's development agency and private investors.

Nanjing hired Duke Hale, who previously worked at Volvo, Mazda, Isuzu and Lotus, to be the new company's president and chief executive officer.

The company said Hale would be responsible for the revival of MG brand in Britain and Europe, followed by the relaunch of MG in North America.

"We looked at a lot of different locations around the country, but none could equal the overall appeal of Oklahoma," Hale said in a statement. "Oklahoma also provides an ideal geographic location to support our distribution efforts for the North American market and for exporting products abroad."

Nanjing Automobile, one of China's oldest auto makers, surprised the motoring world when it outbid top Chinese car maker Shanghai Automotive Industry Corp. to buy MG Rover out of bankruptcy for $98 million (53 million pounds) in mid-2005.

Earlier this year, it took a 33-year lease on the former MG Rover plant at Longbridge in central England.