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Make no mistake, the whistle was blown on Rover’s coalition with the Shanghai Automotive Industry Corporation (SAIC) the minute the ink dried last September on the deal to sell the Chinese the intellectual property rights to build the Rover 75 saloon, the 25 hatchback and the K-series engine that has powered the latest generations of Rover cars. With the blueprints locked safely in a briefcase, canny SAIC executives trotted off home safe in the knowledge that this was the best Chinese takeaway ever ordered anywhere in the West Midlands.
For a measly £67 million, they can now go ahead and produce as many Rover cars as they like, although they cannot call them Rovers. And why on earth would they? Compare and contrast which business is on the up and which one was always on the way down in this shambles of a deal: SAIC — government-owned, 50 factories, sales of about $12 billion (about £6.4 billion) annually and 65,000 workers; Rover — a busted flush since the day BMW walked out of the door and Longbridge’s own Gang of Four, its directors, took over.
The nation and the Government are going to have to face up to the idea that there is no place any longer for Rover in the great motoring scheme of things. After 100 years of manufacturing at Longbridge, Rover has no money, no new models, no hope. Instead, the focus of the entire car industry is swinging towards China and that country’s growing population of carmakers.
Just as the Japanese and the Koreans have copied, adapted and eventually surpassed Western carmakers, so will the Chinese. They have the money and the sheer ambition, backed up by the sort of statistics that would make the eyes water of any industrialist trying to visualise the scale of change going on. Car sales in China have doubled in under three years and are expected to reach five million cars this year, to make the country the world’s third-biggest marketplace after Japan and the United States. All the estimates are that by 2010, China will have overtaken both of them and generate sales of 20 million cars a year. Analysts calculate that if car ownership in China matches average levels across the world, there will be 160 million cars compared with the 25 million or so now.
No wonder that Western carmakers have been prostrating themselves at the feet of the world’s new motoring pioneers. Investments worth more than $13 billion are scheduled by Western carmakers and SAIC already has two of the most lucrative joint-ventures, with General Motors and Volkswagen. The deal with Rover was no more than an afterthought and, while Tony Blair may be running around trying to rescue a partnership, you can bet your bottom yuan that SAIC executives are relaxing, slightly amused at the frenetic activity going on here.
But Rover has had its use. The Chinese are happy to tolerate foreign investment now, but they have targeted the motor industry as one of their key growth industries and having the intellectual rights to two Western-looking cars and a relatively up-to-date and efficient engine will release them to produce models for their home market. So far, Chinese manufacturers have been in the same sort of business that has kept the nation’s illicit trade in counterfeit goods thriving at the bustling street-corner markets of Beijing and Shanghai. Instead of a fake Rolex, though, the ShuangHuan SR-V looks spookily like a Honda CR-V off-roader, except it is the equivalent of £10,000 cheaper. While Honda has gone to the courts to stop SR-V production, it has also won damages of 1.47 million yuan (about £95,000) against Chongqing Lifan, China’s largest motorbike producer, for naming its mopeds Hongdas.
It is not a very subtle rip-off, but it is proof that China has a thriving motor industry and companies such as SAIC will soon start exporting to Britain. That is Britain, one of the great homes of the motor industry, the birthplace of Charles Rolls and Henry Royce, W. O. Bentley, Sir William Lyons, whose Jaguar cars captured the imaginations of millions, and Herbert Austin, the man who built Longbridge into one of the greatest car manufacturing sites in the world. But that was then and this is now, and China is the future.
CRASH COURSE
The rise of the car in China has brought a grim toll. An unbelievable 680 people are killed every day on Chinese roads. About 242,000 people died on China’s roads last year, according to the World Health Organisation, and although it has only 2 per cent of the world’s cars, it accounts for 15 per cent of the accidents. The Government is making driving tests tougher, but the test has no echoes here. One question asks: “If you come across a road accident victim whose intestines are lying on the road, should you pick them up and push them back in?” The answer is no, but you probably guessed that.
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