Manufacturing News

SAIC will move MG production from UK to China

MG will stop making cars in the United Kingdom this year after its owner, SAIC Motor, decided to move final assembly of the MG3 from Longbridge, central England, to China.

The company said the move will improve manufacturing efficiency and centralize distribution. It denied the decision was because of the Brexit vote to leave the European Union, which MG has previously said has delayed its plans to market its cars in European countries outside the UK.

Ending production "will ensure global market competitiveness and support longterm investment in new product lines," MG said in a statement on Friday.

The company estimates 25 jobs will be lost.

Production was restarted in the former MG Rover plant in 2011 with the MG6 midsize car as part of a drive to assure customers that MG was still British in character. SAIC acquired MG in 2007 after taking over Nanjing Automobile, which bought MG Rover following the UK automaker's collapse in 2005.

Slow sales
MG has struggled to gain a foothold since returning to the UK. Last year it sold 3,152 cars in the UK, its only European market. But the company predicts it will increase sales to 5,000 this year after the launch of the new GS compact SUV in the summer. The GS is assembled in SAIC's factory in Lingang, China.

Production at the Longbridge plant was limited to final assembly. The facility received cars from China that were 80 percent finished, leaving 40 workers onsite to add the engine, transmission, front suspension and headlights.

The MG3 subcompact joined the MG6 in 2014. Earlier this year, MG axed the MG6 after it decided not to update the car's diesel engine to meet Euro 6 standards. That left the MG3 as Longbridge's sole model.

Once UK production stops, MG will have to pay a 10 percent import tax on fully assembled cars that arrive from China, as opposed to the 5 percent tax imposed on cars partly assembled locally, the company said.

News of MG's pending production stop was greeted with sadness in the UK. Aston Martin CEO Andy Palmer tweeted: "Deeply disappointed to see the closure of the Longbridge site where I learned so much of my trade." Palmer began his career at Rover.

SAIC will continue to design and engineer MG cars in Longbridge. Earlier this year, the company announced it would invest 1.2 million pounds to install a fifth engine test facility.

MG said SAIC plans to shift more design and engineering functions to Longbridge in the longer term. The center employees 300 design and engineering staff, the company said.

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