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Former rivals on road to merger
China's largest carmaker Shanghai Automotive Industry Corp (SAIC) is moving toward "full cooperation" with smaller rival Nanjing Automobile Group.
SAIC representatives will visit Nanjing Auto's British plant in mid-September as part of the due diligence process.
The two-week investigation is the final stage of a much-anticipated merger of the two carmakers. SAIC investigators will focus on manufacturing and research and development (R&D) at the British workshop.
Nanjing Auto, in need of capital to roll out its Rover platform, is confident about the value of its assets and has high hopes for the UK plant, regarded as an outpost for the overseas expansion of its MG models.
Two years ago, the carmakers were making rival bids for Britain's collapsed MG Rover Group. Now, Nanjing Auto's MG models and SAIC's Roewe have been integrated - using the Rover platform.
Late last month, the first 4S dealer for MG debuted in Nanjing, capital of East China's Jiangsu Province. But the letter of intent for full cooperation signed in late July prompted the Nanjing carmaker to cancel a promotion campaign for the prototype.
The two parties have also reached agreement on brands, R&D and engine manufacture for Roewe and MG.
A dual brand strategy will see Roewe, developed by SAIC using part of the intellectual property rights it acquired from Rover in 2004, positioned as a mid- to high-end brand, according to sources.
Meanwhile, MG will mainly target the lower segment of the market - similar to the positioning of Chrysler and Dodge.
But there are also reports that MG will be mainly exported and made a high-end brand within the country, while Roewe will target the mid-to-high and mid-to-low markets in China.
SAIC will coordinate all resources in terms of R&D, as both sides will be involved in producing engines.
The group in 2004 spent 67 million pounds buying the intellectual property rights to the Rover 75 and 25 sedans, and K-series engines.
Nanjing Auto in 2005 bought the MG brand, a plant in England and Powertrain - the engine unit of collapsed MG Rover - for 53 million pounds.
SAIC representatives will visit Nanjing Auto's British plant in mid-September as part of the due diligence process.
The two-week investigation is the final stage of a much-anticipated merger of the two carmakers. SAIC investigators will focus on manufacturing and research and development (R&D) at the British workshop.
Nanjing Auto, in need of capital to roll out its Rover platform, is confident about the value of its assets and has high hopes for the UK plant, regarded as an outpost for the overseas expansion of its MG models.
Two years ago, the carmakers were making rival bids for Britain's collapsed MG Rover Group. Now, Nanjing Auto's MG models and SAIC's Roewe have been integrated - using the Rover platform.
Late last month, the first 4S dealer for MG debuted in Nanjing, capital of East China's Jiangsu Province. But the letter of intent for full cooperation signed in late July prompted the Nanjing carmaker to cancel a promotion campaign for the prototype.
The two parties have also reached agreement on brands, R&D and engine manufacture for Roewe and MG.
A dual brand strategy will see Roewe, developed by SAIC using part of the intellectual property rights it acquired from Rover in 2004, positioned as a mid- to high-end brand, according to sources.
Meanwhile, MG will mainly target the lower segment of the market - similar to the positioning of Chrysler and Dodge.
But there are also reports that MG will be mainly exported and made a high-end brand within the country, while Roewe will target the mid-to-high and mid-to-low markets in China.
SAIC will coordinate all resources in terms of R&D, as both sides will be involved in producing engines.
The group in 2004 spent 67 million pounds buying the intellectual property rights to the Rover 75 and 25 sedans, and K-series engines.
Nanjing Auto in 2005 bought the MG brand, a plant in England and Powertrain - the engine unit of collapsed MG Rover - for 53 million pounds.
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