MG sales hurt by SAIC personnel changes

The sales of MG-branded cars has been badly hurt by the personnel changes at Nanjing Automobile (Group) Corp.

Statistics show that MG's monthly sales volume during the first five months of this year was not more than 400, compared with a monthly sales of about 800 units from September to December 2007. It is the frequent personnel changes Shanghai Automotive Industry Corp. (Group) (SAIC) launched in senior management of Nanjing Automobile that leads to the poor sales of MG, pointed out industry experts.

SAIC, parent of Shanghai-traded SAIC Motor Corp. Ltd. (SHSE: 600104), inked a contract to acquire Nanjing Automobile from Yuejin Motor (Group) Corp. at the end of December 2007. After the deal, SAIC launched a series of personnel changes on the senior management team of Nanjing Automobile.

It appointed Huang Keji, a top executive with Shanghai GM Dong Yue Motors Co., Ltd., as the general manager of MG in February this year. He was asked to take charge of the production and product quality at MG and Zhang Xin, a top executive with Nanjing Automobile, was asked to be responsible for the sales at MG.

SAIC did not make many adjustments on the marketing team of MG so as to stabilize the latter's sales network in the country.

However, Zhang Xin resigned and then joined in Beijing Automobile. Sun Weijian, also a senior executive with Nanjing Automobile, resigned and then jointed in Chery Automobile Co., Ltd., one of the biggest homegrown automakers in China. Those resignations directly led to the poor sales of MG 7 series cars. In order to change the dropped sales, SAIC nominated Xue Zhenghua, a top executive responsible for marketing at Shanghai Volkswagen Co., Ltd., as the executive assistant to the general manager of MG. However, the management change disappointed everyone as not much improvement was seen in MG's sales volume.

Actually, the fusion of the management team of Nanjing Automobile and SAIC did not go smoothly, revealed people close to the deal. Many positions at MG are seated by two persons. Notably, the quality system of Nanjing Automobile is different from that of SAIC, which therefore delays the rollout of MG new car models. SAIC will make adjustments on the marketing team of MG provided that there is no breakthrough in MG's sales.