MG Rover says its life-saving tie-up with Shanghai Automotive Industry Corporation (SAIC) is on track, despite frenzied media reports that the British Government is increasingly nervous that a deal could collapse in the run-up to the general elections. Autocar understands that face-to-face SAIC-MGR negotiations took place at Longbridge in January.
Newspaper reports claimed the British Government was offering a multi-million pound ‘dowry’ to SAIC. MGR described the stories as ‘utter rubbish… the EU doesn’t allow state aid for car companies’.
But The Times newspaper claimed a further hurdle was placed in the way of a deal. An SAIC-commissioned study by consultants Ricardo had concluded that the 15-year-old Rover K-series engine could need significant re-engineering to extend its working life.
However, an MGR source said that the report was probably ‘wishful thinking’ as the engineering project to ready the K-series engine for Euro4 emissions regulations was virtually complete.
Meanwhile Fiat Auto could also be in the running for a tie-up with SAIC. In a little-noticed move, Fiat’s Iveco commercial vehicle division signed a long-term co-operation deal with SAIC in December.