Business

How important is MG's UK production?

Media playback is unsupported on your device
Media captionLisa Poynter drives the first MG off the Longbridge production line

The Chinese automotive company SAIC's decision to resume MG production in the UK will keep some 400 people in employment.

That is welcome news, though in the greater scheme of things it is of little significance to the British motor industry.

SAIC's investment into the UK is in no way enormous - the set-up merely assembles the engine and gearbox and part of the body shell from parts made in China.

And as it is mainly an assembly operation, rather than a fully fledged manufacturing plant, the benefits in terms of skills and for local suppliers will be limited.

Brand builder

Moreover, the initiative could do little to revive the MG brand in the market place, where it will be challenging car makers such as Volkswagen, Vauxhall and Ford.

At this stage, these established motoring giants hardly see MG - with its planned output of between 2,000 and 3,000 cars in year one - as a credible rival.

This is partly because China's car makers have been too busy serving their booming home market to pay much attention to crowded and slow-growing markets in the US and Europe.

Eventually, however, the Chinese manufacturers will be focusing on global expansion.

When that happens, having a well-known brand such as MG with a long history of being produced in the UK - as well as in China - might help SAIC steal a march on its Chinese rivals.

"It's an iconic brand that's been around for 87 years," says Guy Jones, MG UK's sales and marketing director.

British engineers

In turn, this could well result in fresh investment from SAIC - not least in design, technology and testing facilities - as it will be important for the Chinese company to have a local presence that enables it to tailor its cars to European and other international markets.

Image caption The MG6 is the first of several models designed and assembled in the UK

This process, although still relatively small by automotive industry standards, has already started at Longbridge.

The company recently opened a £5m design studio and technical centre at Longbridge.

"Some 300 [designers and] engineers have been spending five years designing and developing a new range of MG products," says Mr Jones.

"These products are designed for world markets to meet the toughest legislation in Europe and other parts of the globe," he said, insisting the new MG6 "is as British as any other vehicle on the road, perhaps more so than many, in that we designed this from a clean sheet of paper with a British team here in the UK".

SAIC, which is already one of the 10 largest car makers in the world, could also want to invest in the UK to take advantage of the skills on offer, Mr Jones says.

"We have this real powerhouse of engineering expertise in the automotive industry in this part of the country," he says.

"It's important for our parent company SAIC to draw on that experience."

Related Internet links

The BBC is not responsible for the content of external Internet sites