"Roewe cashes in on MG Rover's British heritage" by Bartonrover


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Bartonrover
By Malcolm Moore in Shanghai
Daily Telegraph 26 Aug 2010


Roewe 550.jpg


"On the streets of Shanghai, Roewe 550s like the one pictured are becoming a common sight. Photo: Getty

Today, however, sales of Rover’s twin brother, the Roewe, are soaring in China. And the white gates of Longbridge are open again, producing a new MG6 that will go on sale at the end of the year in the UK in the showrooms of as many as 40 dealers.

On the streets of Shanghai, Roewe 550s, designed in the UK by the team at Longbridge, are becoming a common sight.

In the first half of 2010, more than 47,000 of the cars were sold, at between £12,600 to £18,900, as sales grew by nearly 70pc. Across Roewe’s three models, almost 62,000 have been sold in the first six months.

“It is an impressive performance,” said Jin Yongsheng, an analyst at Sinotrust Information and Consulting.

“It is quite rare for a car like Roewe, at this price level, to achieve sales of over 10,000 a month,” he added.

Shanghai Automotive (SAIC), which bought the designs for the Rover 25 and 75 before the company went bust, went on to invest £4.7m in a British design team at Longbridge because it never bought the Rover marque.

“The cars are successful in China because they have marketed them well, built a good brand and mixed up the technology,” said Mr Jin.

“For example, the Roewe 750 is the old Rover 75, the 550 and 350 were part developed by the new team, and the upcoming W5 sports-utility vehicle is based on the Korean Ssangyong, which itself used Mercedes technology.”

He said Chinese consumers saw the marque as British, but were also excited by the new life that SAIC had breathed into it.

“All the British badge means is that the car has a pedigree, a long history and a certain nobility. But that is it. SAIC has now focused on fashion and technology and the British designers have understood the Chinese market.”

In addition, Roewe is seen as a premium brand. “They started with the most expensive car, the 750, before releasing a mid-priced and low-end car,” said Mr Jin. “Other Chinese car companies still give the impression that they are low-end, even if they are now making expensive cars, because they started at the low end of the market.”

The Roewe is not for sale in Europe, but the new MG that will roll out of Longbridge is destined to form the spearhead of SAIC’s push into Europe.

The rebirth of the company is no comfort to the 6,300 former Longbridge workers who were laid off when MG Rover went spectacularly bust, having squandered £427m in interest-free loans and run up almost a billion of debts.

A government inquiry into the actions of the Phoenix Four, a consortium of businessmen led by John Towers, who took over MG Rover in 2000, found that they had personally benefited by £42m from the business, despite its collapse.

However, MG Rover has fared considerably better in the hands of the Chinese government.

“SAIC has made a good return on its investment,” said Mr Jin."

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Posted 27 Aug 2010, 19:47 #1 


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