MG Rover plans off-road venture

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The Independent Online

MG Rover is hatching plans to re-enter the off-road market after its rescue by the Chinese car maker Shanghai Automotive Industry Corporation (SAIC).

MG Rover is hatching plans to re-enter the off-road market after its rescue by the Chinese car maker Shanghai Automotive Industry Corporation (SAIC).

It is thought that one of the models the two companies would like to develop once their joint venture is signed early next year is a 4x4 model, produced under the MG badge.

An MG Rover spokesman said it was not correct that it would need the blessing of its former owner BMW to complete the deal with SAIC or that it would be prevented from returning to the off-road market.

BMW retained the rights to the Rover brand after it sold the business to Phoenix Venture Holdings in 2000 and earlier this week the German company said no talks had taken place about how the trademark might be used in future.

However, a Phoenix spokesman, Daniel Ward, disputed this yesterday, saying it had recently reached agreement with BMW allowing it to transfer the Rover brand to SAIC.

He added that the only restriction on re-entering the 4x4 market was that MG Rover and SAIC could not do so using the Rover brand, because this would cause confusion with Land Rover, which is now owned by Ford.

Under the Chinese deal, SAIC will inject £1bn to £1.5bn into a new joint venture company 30 per cent owned by MG Rover. The new venture will control the key assets and intellectual property of the two companies but they will each continue to manufacture cars separately in Longbridge and Shanghai.

Four new models are envisaged - a replacement for the medium-sized Rover 45, a new small car, a larger car based on the Rover 75 platform and a new MG-badged sports car.

MG Rover's Chinese deal was the talking point last night of the car industry's annual gathering - the Society of Motor Manufacturers and Traders dinner in London. An SMMT survey issued before the event showed that while the industry is in a better shape than a year ago, skills shortages remain a major concern with nearly two-thirds of businesses having difficulty in recruiting appropriately trained workers. Ninety-five per cent of respondents also said there should be more government commitment towards manufacturing.

Latest figures show that UK car production fell marginally in the first 10 months of the year after a 12 per cent decline in output in October.

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