Nanjing Automobile (Group) Corporation

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
Industry	automotive
Founded	1947
Headquarters	People's Republic of China
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^{[citation needed]} with a history that dates from 1947,^[1][2] making it the oldest of the Chinese automobile manufacturers,^[1] although the comparatively younger First Automobile Works was the first to actually make cars.^[3]

The group's products have included cars, trucks, and buses.^[1]

Nanjing Auto merged with the much-larger SAIC in 2007,^[4] becoming a subsidiary of that company.^[2]

History

Civil-war era

The history of the corporation can be traced as far back as 1947^[1][2] during the Chinese Civil War.^{[citation needed]} In the July of 1949, a repair service center attached to the East China Field Army (which later became the Third Field Army) took control of an automobile workshop in Nanjing, Jiangsu province, former capital of the Republic of China, after the Red Army had conquered the city.^{[citation needed]}

Early light-truck production

In the 1950s oversight of that automobile workshop was transferred to China's First Ministry of Industrial Machinery.^{[citation needed]} It began making China's first domestically produced light-duty trucks in 1958,^[5] the 2½ ton NJ-130, based on the GAZ-51 from Russia.^[6] The Ministry branded the truck Guerin^[6] (跃进牌汽车 - literally meaning "Leap Forward") and approved the establishment of Nanjing Automobile Works that same year.^[6] Truck production continued until 1987 and included NJ-130, NJ-230, NJ-135 and NJ-134 models.^[6]

Technology transfers

Nanjing Auto has repeatedly used technology transfers to make the company more competitive.

Mid-1980s

In the mid-1980s, Nanjing Auto purchased designs and moulds from Isuzu^[7] and technology from the Italian Iveco,^{[citation needed]} the commercial vehicle unit of Fiat,^[8] participating in a spate of technology transfer deals circa 1980 that saw Japanese designs and machinery sold to Chinese buyers.^[7]

The Iveco purchases allowed Nanjing Auto to produce a version of the Iveco Daily.^[9]

1990s

In 1999 the design, and possibly the tooling, for SEAT's first generation Ibiza was purchased and the car sold in China as the Nanjing Yuejin Soyat.^[10]

Acquisition of MG Rover Group assets

Nanjing Auto acquired some assets of MG Rover Group and Powertrain Ltd in 2005 after the group had entered administration. According to the purchase agreement, Nanjing Auto bought MG, Austin and some other dormant British car brands, and the production technology and equipment for the MG ZT and MG TF models. Some equipment and blueprints were repossessed by Honda, as the Honda's intellectual property was used in some of MG Rover's vehicles, in particular, the Rover 45 and MG ZS which were based on the Honda Domani.^[1]

MG production plan

Nanjing Auto decided to establish production bases for MGs at Longbridge and Nanjing. A plan to open another factory in Ardmore, Oklahoma was not realized. The production of some products with high cost if produced in the UK, 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. 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.

In 2007, Nanjing Auto planned to build 13,000 cars based on the Rover 75 / MG ZT sedan, renamed MG 7. These cars would be mostly sedans (saloons), plus some MG 7T station wagons (estate cars). It also planned 3,000 MG TF convertible sports cars.

Pukou plant

MG Foundation Laid

The MG Factory of Nanjing Auto 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 and the MG TF.^[11] Nanjing Auto also started production of the Rover Streetwise-based MG 3SW in 2008.^[12]

Longbridge plant

The plant at Longbridge was for many years one of the most important car making factories in Europe as well as the largest British-owned car manufacturing plant. After the factory of Abingdon closed in 1980, Longbridge was also from 1982 the home of MG.

The site is owned by St. Modwen Properties which 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 Nanjing Auto 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.^[13]

With the merger of Nanjing Auto and SAIC, ownership of the Longbridge plant became a SAIC property. There was a limited re-opening of the Longbridge plant on 29 May 2007, just over two years after the bankruptcy of MG Rover. 250 staff were initially employed, and production of the limited-edition MG TF LE500 sportscar commenced on 1 August 2008. Nanjing Auto says the site can support up to 1,200 staff.

Joint ventures

Nanjing Auto has had at least two joint ventures with the Italian automaker Fiat. A 50/50^[14] joint venture set up in 1999,^[15] but that collapsed sometime in 2007,^[15] and Naveco, a joint venture with Fiat's commercial vehicles unit, Iveco, established in 1996.^[16]

Naveco

In 1996 Nanjing Auto established Naveco (Nanjing Iveco Automobile Co Ltd^[17]) with Iveco,^[16] Fiat's commercial vehicles unit.^[8] The joint venture initially manufactured a version of the Iveco Daily for sale in the Chinese market,^[16] and, as of 1995, it continued to make light trucks, but had added diesel engines as well.^[18]

The company acquired the truck manufacturing assets of Yuejin Motor Co sometime in 2007.^[16][19]

Nanjing Fiat

Another joint venture was Nanjing Fiat Inc,^[14] established with Fiat in 1999.^[15] This Italian automaker quit the company in 2007^[15][20] citing a lack of investment on the part of its Chinese partner.^[15]

As of 2006, it was producing four models: the Perla and Siena sedans, Palio compact and Palio Weekend station wagon.^[14]

The company was located in the Jiangning District's Economic & Technological Development Zone in Nanjing.^[21]

Internal division

As the company further developed its management, four complete production ecosystems were created.

Yuejin Light Truck Co

A major manufacturing base of Nanjing Auto,^[22] it makes light-duty trucks under the Yuejin brand.

Sometime in 2007 Yuejin's truck-making business was merged with the Iveco-Nanjing Auto joint venture Naveo,^[16][19] which continued to sell under the Yuejin brand.^[17]

Naveco

Nanjing-Iveco, or Naveco,^[16] is a joint venture with the Italian Iveco.^[22] As of 1995, it builds diesel engines and light trucks.^[18]

Nanjing Fiat

An automobile joint venture with Italy's Fiat,^[22] it was abandoned by its foreign investor in 2007.^[15][20]

Wuxi Soyat Branch

Located in the an economic development zone in Huishan District, Wuxi, (about 150 km east of Nanjing)^[23] the Wuxi Branch of Yuejin Automobile Co is one of Nanjing Auto's production bases,^[23] and it may be the newest having been built sometime after 2003.^{[citation needed]}

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.

Brands

Car brands owned by Nanjing Auto include:

• Soyat - the Nanjing Yuejin Soyat, a Chinese version of the first generation SEAT Ibiza, is sold under the brand.^[10]
• 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)^[24]
• Yuejin - a commercial vehicle brand^[17]

Legal ownership

Sometime before the 1980s, Nanjing Auto was under the joint jurisdiction of both the central and local governments.^[7] As of 2003, this vehicle manufacturer was owned by Yuejin Automobile Group of Jiangsu, which held just over fifty-percent ownership of the company at this time, and two State firms created to dispose of non-performing bank loans China Huarong Asset Management Co and China Cinda Asset Management Co.^[22] Nanjing Auto is now a subsidiary of SAIC, having been merged with the much-larger automaker in 2007.^[25]

SAIC merger

A result of Chinese State policy to encourage mergers and acquisitions in the domestic automobile market, SAIC Motor and the state-owned parent company of Nanjing Auto, Yuejin Automotive Group, finalized a long-planned merger in December 2007.^[25] Fitful merger negotiations between the two companies had begun in 2001, and the tie-up was widely anticipated.^[22] Prior to the merger, but bidding alongside SAIC,^[1] Nanjing Auto purchased the remaining assets of British MG Rover Group for near US$100 million.^[26]

See also

• Automobile industry in China

References

1. ^ ^{a b c d e f} Rover sold to Nanjing Automobile bbc.com, Saturday, 23 July 2005, 09:36 GMT
2. ^ ^{a b c} Nanjing Automobile (Group) Corporation businessweek.com
3. ^ Key Events, May 21, 1958/Aug. 1, 1958 FAW Official site
4. ^ REFILE-UPDATE 2-SAIC to make MG 6 in UK, upbeat on own-brand car reuters.com, Wed Nov 25, 2009 5:04am EST
5. ^ MG TF sports cars again produced in England xinhuanet.com, 2007-05-29
6. ^ ^{a b c d} How to be Competitive in Chinese Automobile Industry Jianhan Zhao & Lei Gao, International Journal of Economics and Finance, Vol.1, No.2 Aug. 2009
7. ^ ^{a b c} Globalization of the automobile industry: the United States, Japan, and the People's Republic of China Pg. 140 By Xiaohua Yang, Google Book Search, 1995
8. ^ ^{a b} Iveco teams up to invest in heavy-duty xinhuanet.com, 2005-12-17
9. ^ Iveco broadens its presence in China... through the new Naveco Fiat Group Official Site
10. ^ ^{a b} SEAT Ibiza celebrates 25th Anniversary seatcupra.net, Friday, 08 May 2009
11. ^ Chinese plant rolls out first MG - BBC News. Retrieved 27 March 2007.
12. ^ "MG 3SW goes on sale in China from 80,000 yuan". www.gasgoo.com. 2008-06-23. http://www.gasgoo.com/auto-news/6817/MG-3SW-goes-on-sale-in-China-from-80-000-yuan.html. Retrieved 2009-03-13. 
13. ^ "Nanjing puts £10m into Longbridge". BBC News. 2006-07-17. http://news.bbc.co.uk/1/hi/business/5186314.stm. Retrieved 2007-05-01. 
14. ^ ^{a b c} Fiat's China Venture Names Second Chief Executive in 15 Months bloomberg.com, October 15, 2006 23:21 EDT
15. ^ ^{a b c d e f} Fiat to break joint venture ties with Nanjing Auto xinhuanet.com, 2007-06-16
16. ^ ^{a b c d e f} The New Naveco is celebrated in Nanjing Iveco Official Site, 29.10.07
17. ^ ^{a b c} NANJING IVECO ROLLS OUT NEW YUEJIN LIGHT TRUCK FOR EXPORT findarticles.com; AsiaInfo Services, 06-28-20077
18. ^ ^{a b} Globalization of the automobile industry: the United States, Japan, and the People's Republic of China Pg. 159 By Xiaohua Yang, Google Book Search, 1995
19. ^ ^{a b} Fiat's Fidis Sale Would Push Net Above EU1 Billion, Chief Says bloomberg.com, September 14, 2006 10:25 EDT
20. ^ ^{a b} FIAT sells to NAC its stake in Nanjing-Fiat Fiat Official Site, December 26, 2007
21. ^ Introduction to Jiangning Economic & Technological Development Zone Government of Jiangning District Official Site
22. ^ ^{a b c d e} Nanjing Auto gears up to expand chinadaily.com, 2003-09-03
23. ^ ^{a b} Wuxi YueJin Automobile (Group) Corporation - Company Info made-in-china.com
24. ^ MG? Not In America! Auto Trends, September 2, 2008. Retrieved September 7, 2008.
25. ^ ^{a b} SAIC and Yuejin Auto merger creates Chinese car colossus xinhuanet.com, 2007-12-26
26. ^ AUTOSHOW-UPDATE 1-Brilliance plans US sales as early as 2007 reuters.com, Mon Apr 23, 2007 3:22am EDT

External links

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