24 August 2004

Rumours abound that, when MG Rover's far eastern dealings with Shanghai Automotive Industry Corporation are finished, they may be about more than production. Unidentifiable sources both in China and here in the UK have hinted that the Chinese automaker's ambitions to be a top six global manufacturer will swallow up ownership of MG Rover, the last remaining British mass-market car manufacturer, within three years.

The two makers are currently in the process of hammering out a deal concerning the replacement for the Rover 45 we previewed last week (right). This agreement has yet to be approved, and both sides are currently saying very little for fear of endangering the approval process. It is expected that concrete details will emerge within a month or so, pertaining to an SAIC-badged saloon, built in China, for the Chinese market, and a Rover-badged hatchback assembled at Longbridge for the UK.

Beyond this, it has been suggested that SAIC will buy MG Rover. If it goes ahead, the transaction is likely to take place in stages, with the Chinese manufacturer buying an initial stake before the end of the year, steadily turning that into a majority holding, and taking control within 24 to 36 months. This would give SAIC a European production facility, access to MG Rover's technology and knowhow, and a recognised western brand to further its expansion.

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A spokesperson for MG Rover denied the rumours, suggesting that the makers' 'commercially sensitive' agreement concerned production only, and that 'there had been no discussions or appoaches to acquire MG Rover to date.’

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