Remaining assets of MG Rover go to Nanjing Automobile
25 July 2005

The remaining assets of MG Rover were bought by China’s Nanjing Automobile on Friday, its £50-60m bid fending off both the Shanghai Automotive (SAIC) team led by ex-Maserat and Ford man Martin Leach and the David James-led Project Kimber bid. However, Nanjing may face a legal battle with SAIC, which bought the intellectual property rights to the Rover 25 and 75 and the K Series engine for £67m last year.

SAIC believes that since the MG ZR and ZT versions that Nanjing want to make are 90 percent the same, they could have a basis on which to fight a legal case. But Pricewaterhouse Coopers and Nanjing claim that SAIC only bought the rights to the Rover versions. Tony Lomas, of administrators PWC, said the Nanjing bid, ‘was significantly higher than the other offer, and it was also unconditional. SAIC had attached a number of conditions, and in the end, that is what drove the administrator to choose Nanjing.’

Meanwhile corporate trouble-shooter David James plans to submit a bid today despite the sale to Nanjing last Friday. James believes his bid is ‘substantially bigger’ than the Nanjing offer.

Nanjing plans to hire 1000-2000 people at Longbridge to assemble both the MG TF and the MG ZT, the MG ZR/Rover 25 line being shipped to China for assembly there. The MG ZT would also be built in China, along with the K Series. It plans to establish an R and D centre at Longbridge to develop new cars for the company, and is planning to use the Austin marque, killed in 1986, for use on some models in China. In Europe, the emphasis will be on MG, the Rover name dying. Nanjing is China’s oldest car maker, having been founded in 1947, but it is far smaller than SAIC, making 27,000 cars last year to Shanghai’s 879,000.

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