Made In China? (Revamp Of The MG, China To Invade The US Market)

All Maine Matters ^ | September 2006 | by Bob Sanders

[fight_truth_decay]

The more appropriate question would be "What isn't made in China?" In the field of auto repair, we are seeing a slow but deliberate increase in the number of aftermarket parts that are stamped "Made in China". While the amount of parts that are made in China is disturbing, what is even more disturbing is the fact that these components are of very high quality. They easily compare to anything made not just in the US, but anywhere else for that matter. But there is one sector of the economy that up until now has escaped the onslaught of the Chinese invasion: automobiles.

All of that is gonna change in the very near future. Nanjing Automotive, a Chinese automaker, bought the MG brand name for 100 million dollars from the former British automaker after its assets were in receivership. MG's hard assets were negligible in value. What Nanjing bought was the MG label and the legal right to sell under the MG banner.

They have plans to completely revamp the MG, totally modernizing the mechanical and electrical systems of the line while capitalizing on the nostalgia factor and the beauty of the MG. In other words, they will build an MG that will actually run and look absolutely stunning doing it.

How am I so sure of this? China has a much more mature auto manufacturing industry than most people realize.

You might expect Chinese automobiles to be archaic versions of Communist era Russian cars. You know, those big, ugly, lumbering hulks of iron that would have as much appeal in the American market as a Yugo. If you were to see a minivan manufactured by Brilliance China Automotive, another Chinese auto manufacturer, winding down your street you would never pick it out from other minivans except for the unfamiliar logos plastered on them. They are fuel injected, with a full complement of creature comforts and engine control systems, in just about every sense a thoroughly modern automobile.

Although these vehicles do not meet all the EPA and FHTSA requirements for the US market in their present production configuration, this hurdle could be passed by retooling their product line. It is the opinion of auto industry execs that the Chinese auto industry got up to speed so quickly by buying technology and components from other Pacific Rim manufacturers, namely Toyota.

Brilliance has a working arrangement with BMW to accelerate the level of technology in their vehicles, to bring them up to the same plane of their worldwide peers. Brilliance's assembly plants are as modern as any in the world, and they have located them in areas where there are pools of educated workers available, and the Chinese culture, just like the Japanese, naturally lends itself to producing nothing but the very best quality their systems allow them to achieve.

And the Chinese will have pricing power when they invade the American market.The minivans that Brilliance China produces sell for under 10 grand in equivalent Yankee dollars. They would be priced higher in the American market, but like all Chinese goods, they would come in at an extremely aggressive price structure. For decades the Japanese Juggernaut has been competing very successfully in the American auto market. Soon the Chinese marauders will be giving everyone in the auto manufacturing business, including the Japanese, a corporate case of ulcers.

Bob Sanders is a Master Auto Technician who works in Brewer.

[Note: AllMaineMatters is a refreshing conservative opinion based free newspaper found in the more rural areas of Maine with some offerings in the Augusta, Bangor community. AllMaineMatters.com (pdf or html.format) offers an active conservative based forum - asmainegoes.com.]

[fight_truth_decay]

The company plans to sell MGs in the U.S., and may even manufacture them in North America.

The MG brand disappeared from dealerships on the left side of the pond in 1980, but you can check out the MG model range, circa 2005, at the MG Rover website. The model rumored to head up the brand's relaunch is the MG TF (above).

MG auto list.

"GB Sports Car Co., the company partnering with Nanjing Automobile in reviving part of the collapsed British automaker Rover's U.K. plant, originally hoped to use the Austin-Healey nameplate to build expensive sports cars, positioned above MG and pitched against Porsche," reports the InsideLine of Edmunds.com.

1954 MGTF 1250

"But Fraser Welford-Winton, managing director of GB Sports and former head of Rover's engine-making subsidiary, said the idea had been dropped following discussions with Nanjing, the Chinese company that won the battle to buy MG Rover's assets. Instead, the focus will now be on the MG brand; a plan to build sports cars and large sedans on part of Rover's Longbridge factory is being drawn up."

"Taking MG back to the U.S., where it has a strong following, is central to this plan, especially as GB Sports Car Co. is backed by American investors."

[Recon Dad]

They have plans to completely revamp the MG, totally modernizing the mechanical and electrical systems of the line while capitalizing on the nostalgia factor and the beauty of the MG. In other words, they will build an MG that will actually run and look absolutely stunning doing it.

Something the Britsh had a problem doing.

[fight_truth_decay]

Yes... I know China has well invaded the US marketplace, correction: The Automobile Marketplace

[Slump Tester]

But the British didn't have slave labor.

[expatpat]

My 1936 MG (model PA) ran fine. The same model had run in the 24-hr Le Mans race when the race was a two-year affair (1st year qualifying, 2nd year the race). The PA was judged fast enough and reliable enough to qualify.

[Mrs. Shawnlaw]

Years ago I went to AutoZone to get brake parts to replace the brakes on my '90 PONTIAC Grand Am. Bold black stenciled letters on the carton 'Made In China'. I laugh out loud when I see the Union-Buy American stickers or the Hungry?Eat your Import.

[chesty_puller]

But the British didn't have slave labor.

They will be made in Ardmore OK.

[abovethefray]

Exactly. The (communist) Chinese merely had to steal and/or copy existing technology, use a slave labor force (at the point of a gun) to build their automotive copies, and now they will be welcomed to the worlds' largest,most legitimate marketplace. All with no hard feelings,apparently.
I think I am missing something here.

[Finalapproach29er]

Bring back the El Camino!!!!!!!

[Fido969]

If the price were right, I'd buy one.

[Kenny500c]

Brilliance is already building Beemers in China and I doubt they will export them to Germany, I expect them to show up in California sooner than later.

http://www.brillianceauto.com/

[RedfishParadise]

I agree that China can build cars cheaper with slave labor. It would seem a good and inexpensive U. S. policy (cheaper than a war)would be to encourage democracies by a policy of freer trade with Countries that are democratic. China would not rate high and therefore, would not get as many trade benefits. We also need to use the same thinking and democracy incentives by having a UN replacement organization that only includes democratic countries.

[Clay Moore]

"While the amount of parts that are made in China is disturbing, what is even more disturbing is the fact that these components are of very high quality."

ROFLMAO! He is taking someone elses word on this. Hey bud, they are lying to you!

[fight_truth_decay]

Sanders is a Master Auto Technician

China's Rise as Auto-Parts Power Reflects New Manufacturing Edge

Summary: Not long ago, Chinese auto-parts were known for their poor quality, lack of precision and relatively high prices in comparison to their US and German competitors'. But these days China is turning out much better auto-parts, and now exports more than it imports for its high-growth domestic auto industry. Heavy investment in computer assembly and machinery have taken Chinese manufacturing beyond the simple consumer goods of years past and into 'the entire range of products, from telecom equipment to textiles.' U.S. employment in the auto-parts industry has fallen to about 644,000 in 2004 from about 721,000 in 2002. Delphi Corp., which has plants in China, is in bankruptcy protection, and smaller suppliers are finding it increasingly difficult to compete with China. Meanwhile, rising wages have forced Chinese manufacturers to seek out higher-value products, such as car parts, and increase productivity to reduce reliance on low-cost labor.
Comment on related stocks/ETFs: As noted in the article, these trends spell ongoing challenges for parts producers such as TRW Automotive (TRW), Clarcor (CLC) and Dura Automotive (DRRA), while makers of high-end factor equipment, such as Rockwell Automation (ROK) and Johnson Controls (JCI) should prosper from the Chinese business.

Mick Weinstein submits: Excerpt from our One Page Annotated Wall Street Journal Summary
http://china.seekingalpha.com/article/14725