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MG Rover’s talks on forming a joint venture with China’s Shanghai Automotive Industry Corp. (SAIC), whose unit lists A shares in Shanghai, were moving forward, the British carmaker said, but it gave no timetable for wrapping up an accord.
“We’re making good progress and (holding) a lot of talks with our Chinese partner, but what I can’t give you is any kind of firm date to pencil into your diary,” an MG Rover spokesman said.
The deal aims to use a cash influx to help rejuvenate Rover’s model range, while giving State-run SAIC a beachhead in Europe as well as access to technology and expertise.
Britain’s last independent volume carmaker had earlier suggested a deal could be clinched by January or February. The spokesman said the complex accord had not yet been presented to the Chinese Government, which must approve any plan.
The precise level of ownership of the venture has not emerged, but Rover has said SAIC would have a majority stake.
The venture to develop and make cars in England and China aims to produce 1 million cars a year. The range would include a replacement for the Rover 45 due in 2006 and eventually a new small car, a large executive model and a sports car.
The plan calls for production of all the core models in both locations, MG Rover has said, with the partners focusing output on models tailored to meet local demand.
SAIC and Rover said last June they had signed a cooperation agreement, but details of the accord have been scarce.
SAIC is already the main Chinese partner of both General Motors and Volkswagen. It aims to become one of the world’s top six automakers by 2010 and has said it wants to list its stock overseas to raise a reported US$2 billion.
It agreed last year to buy control of South Korea’s Ssangyong Motor Co. for about US$500 million, and executives have said SAIC will keep seeking overseas acquisitions and will develop its own brand.
MG Rover has struggled to make money after Germany’s BMW AG sold it to Phoenix Ventures Holding for just 10 sterlings in 2000 after years of losses.
(Shenzhen Daily January 20, 2005)
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