The news that MG is to invest in new models for assembly at Longbridge is welcome news not just for the company but for the Midlands economy as a whole.
New jobs, secure investment and the continuation of a motoring heritage stretching back more than 80 years is an enticing proposition. But sentiment alone will not be enough to guarantee the future success of the company.
When it does come to launch its new products on the market the rejoicing at the brand’s rejuvenation could be short lived because the company is likely to face some stiff competition in the various sectors it has chosen to compete in.
The first model will be a European variant of the Roewe 550, which will be equivalent in size to a Vauxhall Vectra.
The 550, which has been designed and engineered by MG parent Shanghai Automotive Industry Corporation at its Leamington Spa-based technical centre, was unveiled to the public at the Beijing Motor Show earlier this year and has been well received.
China’s emerging middle classes are increasingly becoming more affluent and desire a status symbol to go with it. The initial success of the Roewe 750, based on the old Rover 75, suggests that the car will find a ready market in China.
However, even upgraded for the European market will that success be repeated here - in what is one of the most competitive and overcrowded motoring sectors.
MG has not said where the vehicle’s market placing is likely to be but it is thought that it will pitched against the likes of the class-leading Ford Mondeo and the Vectra replacement, the Insignia, together with others including the Mazda 6, Toyota Avensis, Renault Laguna and Peugeot 407.
The MG will have to offer a lot more than the strength of its badge if it is to make inroads against these heavyweights.
However, the company is not deterred by the challenge and the lessons it will learn from the TF LE500 will be invaluable. If it can produce high specification cars very cheaply – something which MG Rover never could – then it may have it unique selling point and hence create a niche in the market.
Spokeswoman Eleanor de la Haye said: “The success of the Olympics has shown that when China puts its mind to something then it will see it through and make it work.”
Do not under-estimate this. The Chinese are in this for the long-term.
There may have been teething problems with the beginning of the project but the acquisition of Nanjing by SAIC has been the making of MG.
Behind it now is a company with 33,000 employees and one which sold 1.3 million vehicles in 2006, generating a profit of around £667 million.
Predictions are that the company could be worth around $22 billion – something which would make most motor manufacturers drool with envy.
The Roewe 550 variant will be brought on-stream very quickly, largely due to the shared platform it will be based on.
The tools can be adapted quickly and such is the spare capacity at Longbridge that accommodating production will not be a problem.
It is likely to be a more luxurious offering than the Chinese version, reflecting the more sophisticated European buyer. It will also be badged as an MG, underlining its desirability.
The car’s current styling betrays its Asian origins and the European model is likely to be facelifted to reflect different tastes, however, what is underneath the skin is likely to be little altered.
The car could be showrooms by 2010 and the company will be able to take advantage of a more mature dealer network by then.
Following the 550 variant will be a new Ford Focus rival – probably the most competitive of all car markets – and then a new supermini, which will have a ready market provided it fulfils the basic requirements of this sector, which is primarily economy – both in terms of price and running costs.
In three years’ time there will be a replacement for the TF, which by then will be a 20 year old design. No details on the costings of these models has been proposed but all will have to be carefully marketed if they are to achieve buyers, however, if the Chinese have their way then there will only be one victor.