Nanjing Automobile (Group) Corporation

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Nanjing Automobile (Group) Corporation
(Chinese: 南京汽车集团有限公司 or 南京汽車集團有限公司)

Type	subsidiary of SAIC
Founded	1947
Headquarters	People's Republic of China
Industry	automotive
Employees	16,000
Website	nanqi.com.cn

The Nanjing Automobile (Group) Corporation (simplified Chinese: 南京汽车集团有限公司; traditional Chinese: 南京汽車集團有限公司; pinyin: Nánjīng Qìchē Jítuán Yǒuxiàn Gōngsī) is a state-owned enterprise with a history that dates back to 1947 and one of the oldest Chinese automobile manufacturers. At 2004, the group, with over 14,000 employees and 3,400,000 m² area, has total assets of RMB 12 billion and an annual production capacity of 200,000 vehicles. The group's major products are cars, trucks, and coaches.

History

The history of the Corporation can date back to 1947. It was first established as a repair service column in the East China Field Army (later became the Third Field Army of the People's Liberation Army) in the province of Shandong. This was the period of civil war between the Kuomintang government (the Nationalist or KMT) and the Communists. In July 1949 it took over an automobile workshop of the KMT government in Nanjing (Capital of Republic of China since 1928) when the Red Army conquered the city.

In the early fifties, the plant was transferred to China's First Ministry of Industrial Machinery. It successfully produced the first light trucks of China on March 10, 1958, the 2½ tonne NJ-130 based on the GAZ-51 from Russia. The Ministry named the truck Guerin autos (跃进牌汽车 - which literally means 'Leap Forward') and approved the establishment of Nanjing Automobile Works.

From 1958 to 1979, Nanjing moved to a leading position in light auto market in China. In 1980, in order to satisfy the demand of market, it was the first to install a diesel motor in light trucks. In 1982, Nanjing introduced a whole set of moulds of Isuzu cabs for US$750,000, which enabled an update of the truck and leaping to become a leader in China's auto market. The company also introduced modern technology from Iveco and the auto output had a sharp increase from 250,000 units to 650,000 units.

In 1996, during the period of the Ninth Five-year Program (1996-2000), the company established Nanjing Viejo Automobile Co. with Iveco Company, part of Fiat Auto S.p.A. of Italy. It established Nanjing Fiat Company, a join venture of Fiat, initiating the production of saloon cars. At the meantime, it carried out shareholding reform on Yuejin Autos and established Yuejin Automobile Shareholding Co., Ltd.; it introduced the assembly line and technology of Seat's Ibiza (first generation) from Europe and established Wuxi Soyat Branch.

Currently, the company has reached an annual capacity of 200,000 sets of various autos, including over 400 kinds of saloon cars, light trucks, heavy trucks, light buses, off-road vehicles, estate cars, special vehicles and special-purpose vehicles as well as a wide series and multi-type product mix of various chassis, which has developed into four integrated production bases of Yuejin, Nanjing-Iveco, Nanjing-Fiat and Soyat.

On July 22, 2005, the Nanjing Automobile Group purchased the remaining assets of British MG Rover Group for £53 million.

On December 2007, the Nanjing Automobile and SAIC Motor announced a long-expected merger.^[1]

Brands

Car brands owned by NAC:

• Soyat (Chinese car brand, their models are licensed by SEAT and Isuzu)
• MG (Acquired MG Rover Group and Powertrain Ltd assets, including the brands: Wolseley, Austin, Morris, Vanden Plas (outside the US & Canada), American Austin, Princess and Sterling)^[2]

Truck brands owned by NAC:

• Yuejin

NAC Joint Ventures:

• Nanjing-Fiat
• Nanjing-Iveco

Wuxi Soyat Branch

The Wuxi Soyat Branch(南汽新雅途) of Nanjing Automobile (Group) Corporation is the fourth integrated production base following Yuejin(南汽跃进), Nanjing-Iveco(南京依维柯) and Nanjing-Fiat(南京菲亚特), and the second production base of saloon cars. It locates at Wuxi Huihan Economic Development Zone(无锡惠山经济开发区), just north of the city of Wuxi(无锡)(about 150 km east of Nanjing), in Jiangsu province of eastern China, at the centre of the Hangzhou-Shanghai-Nanjing triangle. The site covers an area of 640 mu(亩), with a floor area of 670,000m².

Soyat current model list:

• Soyat NJ7150 and Soyat Unique (under SEAT licence)
• Soyat-Junda SUV (under Isuzu licence)
• Soyat-Junda Pick-up (under Isuzu licence)

These models are mainly sold inside mainland China.

Yuejin Motor Group

The Nanjing Automobile Corporation sells light-duty trucks under Yuejin brand in China and overseas.

Yuejin Motor Group possesses an annual production capacity of 200,000 vehicles of various models. The products cover different types of models, including light duty trucks, light duty buses, cross country vehicles, small-sized passenger/cargo transportation vehicles, special-purpose vehicles as well as various types of chassis etc.

Yuejin Motor Group has been engaged mainly in exploring the overseas markets of automobiles and parts & components thereof. The products have been exported to many countries and regions such as Argentina, Chile, Senegal,South Africa, Sudan, Ivory Coast, Namibia, Djibouti, Tanzania, Cyprus, Togo, Italy and Spain. In addition, it has obtained successful experience in establishing abroad SKD/CKD assembly plants of trucks and minibuses.

In late 2006, Yuejin's truck making business is merged with Naveo, the commercial van join venture with Iveco. It is reported that trucks will continue to be sold under the Yuejin brand. See details in following section.

Nanjing-Fiat and Nanjing-Iveco joint ventures

The 50-50 joint venture between NAC and Fiat was set up in April 1999. Located in the Jiangning District New Technology Park of Nanjing, Nanjing-Fiat produced and sold 24,000 vehicles in 2002, bringing a sales revenue of 2.3 billion yuan (US$280 million). Nanjing-FIAT produce four models: Fiat Palio, Fiat Palio Weekend, Fiat Siena, designed by I.DE.A Institute and Fiat Perla the first model jointly designed by Fiat and Nanjing Fiat Automobile.

Fiat is a latecomer to the China market and showed half-year sales of 16,442 units for the first six months of 2006. The company hoped the Perla, which went on sale in September, 2006 would improve its sales to 40,000 units a year, which would be an improvement of 20 percent. The combined sales of Perla, Siena, Palio and Palio Weekend by Nanjing Fiat in 2006 was over 33,000 vehicles, an improvement of 37% over that of previous year, though represented less than 1% market share. Sergio Marchionne, the chief executive officer of Fiat says the automaker is aiming to raise sales in China to 300,000 cars a year by 2010. Fiat vows to introduce one new model a year in China in the next four years. ^[3] In the mean time, there were reports that Fiat was dissatisfied with the performance of the joint venture, blaming its local partner (Nanjing Auto)'s distraction on Rover/MG project and was actively seeking resolution including possibly to replace its local partner. ^{[4] [5]}

Iveco, part of the Fiat Group, also has a US$300 million joint venture, Naveo, in co-operation with the Yuejin trucks, producing Iveco commercial vans. Fiat announced in September 2006, Naveo to acquire Nanjing's Yuejin truck making business and plan to produce up to 100,000 vehicles a year. ^[6] In 2006, Yuejin sold about 43,000 vehicles and Naveo sold over 20,000 vehicles. It plans to expand sales to 90,000 vehicles (Yuejin to increase by 50%, Naveo increases by 20%). It is hoped that Yuejin trucks can be strengthened with technologies from Iveco, and furthermore, supports of Yuejin trucks in overseas markets can be backed by Iveco's international network. Iveco is the world's second biggest bus manufacturer, following only Mercedes-Benz.

In December 2007 Fiat announced that it is going to end its joint venture with Nanjing, the passenger car production will end, but co-operation continues still with LCVs.^[7]

MG Project by Nanjing Automobile

NAC-MG logo

In a significant step taken by NAC in its global strategy, it acquired the assets of MG Rover and Powertrain Ltd. According to the purchase agreement, Nanjing Automobile bought MG, Austin and some other dormant British car brands, and production technology and equipment for the MG ZT and MG TF. The tooling for the other car in the then MG line-up, the MG ZS, was repossessed by Honda as it was based on an old Honda design, so production of this model was never an option for Nanjing Automobile.

NAC decided to establish production bases for MGs at Longbridge, Nanjing, and possibly Ardmore, Oklahoma. The production of some products with high cost if produced in the U.K., such as engines, transmissions and medium and low end vehicle products, would be transferred to China, where a supply chain would also be set up. A production facility would be retained in the UK, with the original Longbridge site integrated to resume the production of MG TF sport cars. This could later be joined by other high end products including the ZT and ZT-T. Meanwhile, by making use of the R & D capability and personnel in the UK as well as that of China, the Euro IV engines and a new generation of vehicles would be developed and then produced in both China and the UK. Then, the sales network in China established by NAC and the global sales network of the former MG Rover could be used to meet the demand of various markets in China, Britain, Europe and North America.

In the original plan, the production would have been resumed in the Longbridge in March 2007, when MG TF, MG ZT and MG ZT-T were meant to be relaunched. However, this was delayed and Longbridge finally re-opened for production in mid 2008 producing the limited edition MG TF LE500.

MG Production Plan

In 2007, Nanjing Automobile planned to build 13,000 cars based on the Rover 75 / MG ZT sedan. It also planned 3,000 MG TF convertible sports cars. Nanjing's Rover 75-based cars would be mostly sedans (saloons) and be called the MG 7 but they would also build some station wagons (estate cars) called the MG 7T.

By 2011, Nanjing hopes to assemble 85,000 MG 7s a year and 25,000 MG TFs. Nanjing will source as many parts as possible in China for both models to keep costs down.

With the merger of NAC and SAIC, ownership of the Longbridge plant is now vested in SAIC. There was a limited re-opening of the Longbridge plant on 29 May 2007, just over two years after the bankruptcy of MG Rover and production of the MG TF LE500 commenced on 1st August, 2008.

The Fifth Integrated Production Base: MG Plant in China

MG Foundation Laid

The MG Factory of Nanjing Automobile Corporation is located in the High-level New Technology Economic Development Zone in Pukou (a new district of Nanjing). The capacity of the Nanjing-MG Factory will reach 200,000 autos, 250,000 engines and 100,000 gear-boxes. It was originally predicted that the factory, which covers 290,000 m², would have a construction time of seven to nine months, however it was completed in six months and the first cars were produced in March 2007. The initial MG range consisted of just the MG 7, a successor to the MG ZT, and the MG TF. ^[8] Nanjing also started production of the Rover Streetwise-based MG 3 in 2008.^[9]

The Longbridge Plant

NAC-MG UK Research and Design Centre

The plant at Longbridge was for many years one of the most important car making factories in Europe and was the largest British owned car manufacturing plant until the bankruptcy of the MG Rover Group. After the factory of Abingdon closed in 1980, Longbridge was also from 1982 the home of MG. Longbridge employed 16,000 ten years ago, down to 6,000 when the company collapsed into administration in April 2005.

The site is owned the St Modwen Properties company who acquired 412 acres (1.67 km²) in two deals in 2003 and 2004 for £57.5 million and leased it back to MG Rover Group. A 33 year deal was signed in February 2006 between NAC and St. Modwen Properties covering the lease of 105 acres (a quarter of the total area of the Longbridge plant) but including the two main car assembly plants, the paint shop and administrative offices at a rent of around £1.8 million a year. An estimated £10 million was estimated to be needed to reopen the factory.^[10].

Shortly after Nanjing Automobile bought the company it revealed plans to employ 1,200 workers and build 100,000 cars in 2006, but these plans have been revised and it is predicted that approximately 600 jobs are now likely to be created and 15,000 cars will be assembled at the beginning. The Longbridge plant re-opened on 29 May 2007, with just 250 staff initially being employed for assembly of the MG TF sports car. Nanjing says that there is a capacity for up to 1,200 staff to be employed there in the not too distant future.

The development of Euro IV compatible engines, previously completed by Powertrain, would be carried into production. Bulking up the European end of the operation, a UK Research and Design Centre would be set up in order to develop Euro-specific models. There will also be a research and design centre in China for the development of cars for the Chinese market.

Nanjing has plans to revive the Austin marque (last used in 1989) for future models that are more downmarket and family orientated.

MG Motors North America: Ardmore Plant

On July 12, 2006 senior officials of Nanjing Automobile Corporation announced the revival of the historic MG brand of vehicles, as well as plans to build a new MG product in Oklahoma, with the formation of MG Motors North America, Inc., in a ceremony in Oklahoma City.

Under the plan MG vehicles would not only be built in Nanjing, China, the Longbridge assembly plant near Birmingham, England but also at a new American assembly plant to be built at the Ardmore Air Park in Ardmore, Oklahoma. Headquarters for MG sales, marketing and distribution (outside of Asia) would be located in Oklahoma City. Research and development would be in Norman at the University of Oklahoma. NAC recruited a seasoned American auto executive, Duke T. Hale, to be the new company’s President and Chief Executive Officer responsible for the revival of MG in the UK and Europe followed by the re-launch of MG in North America.

According to MG Motors officials, approximately 550 jobs would be created in Oklahoma, including headquarters operations, assembly operations, parts and distribution operations and research and development. Construction of the factory started in early 2007, with production set to start towards the end of 2008.

However, as of the beginning of 2007, there were reports of disagreements between the Americans partners and Nanjing Auto over differences of opinion regarding MG's future with speculation that the Americans were impatient with Nanjing, who seemed to be more heavily favouring their existing British Longbridge factory and their own Chinese operations over the planning of the US factory. There is also believed to be extensive cultural difference between the Chinese and the Americans that are causing rifts and it is a learning curve.

See also

• Automobile industry in China

References

External links

• Nanjing Automobile Corporation site
• MG Rover
• Austin Memories
• Soyat site
• Yuejin site
• Nanjing-Fiat site
• Nanjing-Iveco site
• Nanjing Dongyu Auto Group