The auto-industry is half made up of yesteryear folklore and half consists of tomorrow’s new horizons, and there is perhaps no better example than the 80+ year old MG. Previously under NAC’s wing, the blame for a procrastinated gestation period and over-due ‘re-birth’ laid with SAIC.
The circumstances surrounding the UK sale of MG – Rover, whilst not forgotten, have subsumed and now all eyes are upon the consistently delayed return of the MG-TF mid-engined to the UK, European, Chinese and perhaps even US marketplace.
Those delays have been stated as initially project administrational problems, then SAIC-Nanjing organisational integration problems and latterly the desire to achieve benchmark product quality. All along industry observers have assumed that the Chinese would simply produce for their own rapidly enlarging and fragmenting domestic market, and employ the maintained portion of the former Longbridge production centre to assemble Chinese sourced CKD kits for the UK and Europe.
Production from both Chinese and UK sites is supposed to commence at the end of April and end of July respectively, but given the previous inability to meet self-set deadline targets, few are holding their breath, except perhaps those SAIC execs such as President Chen Hong.
Of course Hong and his team are endeavouring to match European quality levels with Chinese cost bases, much as Manganese Bronze are endeavouring with the TXI taxi. But there is a world of difference between the emotionally driven expectation levels of a premium branded sportscar buyer and the functionally driven requirements of a taxi-owner operator or his passengers. Perfecting the MG experience is what we, potential buyers and of course MG enthusiasts hope NAC and SAIC have been long deliberating
But what of the business-end of ‘market expectations’? Where exactly will SAIC try and sell the car? Given China’s obvious export ambitions and the global recognition of the MG marque, it would make complete sense if the TF were sold (ultimately) globally. To this end given SAIC’s entwined relationship with the able engineering consultancy Ricardo via their Ricardo 2010 alliance (for Roewe 750 & KV6), Chen Hong must have ordered the TF project team to investigate the costs of engineering a US compliant TF. NAC first muted the idea of MG returning to America back in 2006, indeed the potential for setting up a local manufacturing base in Oklahoma. Whilst this was undoubtedly used as a bargaining ploy versus Longbridge workers, the idea of a 2nd local manufacturing hub makes complete sense if the $US stays weak (as expected) and the Renminbi maintains its strength [presently at its highest level of approx Rmb7 :$1)
So the question is “has there been more behind the scenes re-engineering of TF than the ‘simple’ cost-down exercise first imagined?” Watch this space.
The fact is that SAIC recognises that the US has historically held MG close to its heart, seen alongside Alfa-Romeo’s (Duetto), as the quintessential European open-top sportscar. Given the massive success of the Miata/MX-5 there is undoubtedly a large market for such a car…a car with mass market prestige (ie read snobbishness) beyond the small Mazda. (Think of it as Miata meets Mini Euro-chic or some such). FIAT’s Marchionne will have recognises that the first to get a re-born Euro sportscar brand to the US market will obtain the press accolades and critically the aspirant consumers’ ‘share of mind’….after all many would like to re-live Dustin Hoffman’s ‘Duetto experience’ from The Graduate, or Ryan O’ Neil’s ‘TC experience’ from Love Story.
Auto-culture romanticism apart, and looking at the essential business issue of automotive project profitability, if investigated properly the MG-(T)F could well go down in auto-history as a possible contender as the most value-creating production exercise, as yet without an end. [ But then again, we have to state that there's been as much creative thinking in the investment and divestment philosophies of MG's quick-succession parent companies....a perfect blend of prudent, successful financial engineering and mechanical engineering!]
It was born from a Rover Group skunkworks project named ‘Pheonix’ & PR3, prompted by the 1989 Miata’s appearance and set very strict cost guidelines which were governed by a low-technology/low-cost philosophy. That in reality meant re-appropriating other vehicle structures and technologies that had been already amortised in production or were being developed by other project cost-centres, hence reducing to a minimum the apparent cost of the project, so as to gain Board approval at the 16-20K pa volume.
Hence given its ‘beg & borrow’(if not ‘steal’) engineering roots and the low cost tooling and generous supplier contracts gained by Rover Group, the first lifetime of the car that ran from 1994-2005 would have made the ROI and IRR figures look wondrous given auto-industry norms. Shift that tooling to China and obtain a much reduced BoM (Bill of Materials) with the advantage of greatly enhanced production volumes and even though the ‘old girl’ TF will be theoretically out of date compared to Miata 3, the business case fundamentals look impressive given that in reality SAIC will be focusing on 'second-life' China sales, less so European, and possibly look forward to yet another 3rd life-cycle in North America.
Thus the 'Phoenix' rose once before in the UK & Europe, again now in China & Europe, and possibly yet again in the future in the USA.
How FIAT & Alfa react to the USA dilemma will be interesting to see unfurl. It is looking into local production of Alfa’s in the NAFTA region to possibly combat SAIC’s Oklahoma plans. FIAT’s preferred spot is presently Mexico, and ironically it too could prove the lure for SAIC, and not only for cost reasons…for Mexico’s flag consists of a snake eating bird, very apt given the snake in Alfa's logo (derived from the Milanese coat of arms).
But ultimately much of MG’s and Alfa’s future lies in whoever will Graduate first in the US and re-create the European sportscar Love Story
