Breaking News : GM should sell Buick to SAIC

SHANGHAI : November 4, 2008 - So General Motors is lobbying Washington for money to buy Chrysler. But before tax money is approved for the deal, I'd like GM to try harder to sell assets and raise private capital.


Here's an idea: Sell Buick to its partner in China, Shanghai Automotive Industry Corp.

I claim no special insight from decision-makers at GM or SAIC, but the deal makes sense for various reasons.

First, the obvious: GM is burning through an estimated $1 billion (6.85 billion yuan)of cash a month. Moreover, its lending arm, GMAC Financial Services, is so short of capital that it can't adequately provide auto loans to consumers.

So it's time for difficult decisions. Buick has long been a core brand for GM. But in today's crisis, it's expendable. GM does not have the money to reinvigorate Buick's product lineup, now down to just two sedans and a crossover in the United States.

GM already has too many brands, which it has recognized by putting Hummer up for sale. The problem will only worsen if it acquires the Jeep, Dodge and Chrysler brands.

It's best for GM to sell Buick while the brand still has value. It's hard to say how much Buick is worth, but India's Tata Motors paid $2.3 billion (15.75 billion yuan) for Jaguar and Land Rover. So I'm guessing Buick might fetch $1 billion (6.85 billion yuan).

While Buick is drifting down in America, it's sound in China. Chinese consumers' regard for the brand predates the Communist revolution.

Buick sales are higher in China than in the United States. Last year, GM sold 185,791 Buicks in the United States and 331,780 in China. GM and SAIC jointly operate an important product development engineering center in China.

In North America and Asia, Buick's manufacturing, product development and dealers are embedded in GM's organization. SAIC could start with a modest role as Buick's new owner but gradually assume more operational responsibility.

In today's crisis, creative solutions are imperative. Nowadays, nothing is sacred in Detroit.

[Source : Automotive News China]

Production resumes at Longbridge

Full-scale car production has restarted at the former MG Rover plant in Longbridge

MG TF LE 500

Shanghai Automotive (SAIC) said it had sold 70% of the orders for its new model, the MG TF LE500.

The company has 55 dealers across the UK and believes the first cars will be with customers by next month.



MG Rover collapsed in 2005 with the loss of about 6,000 jobs. It was bought by Nanjing Automobile Corporation for £53m but they were taken over by SAIC.

There are currently about 165 workers at Longbridge but the figure is likely to rise, according to the company.

'Looking forward'

SAIC said it hoped to produce 700 of its sports cars by the end of the year. The model will cost nearly £16,500.

Eleanor De La Haye, of MG UK, said: "We are delighted to have reached this important point and are looking forward to seeing the cars in showrooms shortly."

Birmingham City Council leader Mike Whitby said: "This is truly an historic day for our city and our region and it points towards a much brighter future.

"Combined with Tata's recent collaboration with Jaguar and Land Rover this is bringing the rebirth of our automotive industry one step closer to reality."

Longbridge was opened in 1905 by motoring legend Herbert Austin.

As well as producing cars, it was used as a munitions factory during both world wars and began production of the iconic Mini in 1959.

It also produced the popular Metro and Rover 200 models before the Rover company was bought by BMW in 1994.

BMW subsequently sold the firm to the Phoenix Consortium, under whom it went into administration in 2005.

[Source : BBC]

Updated ! SAIC source : No contact with Ford on Volvo

2008 Volvo XC70

Shanghai Automotive Industry Corp. is not talking to Ford Motor to buy Volvo, an SAIC source said.

"As far as I know, our company has never contacted Ford on the purchase of Volvo Cars," said the source, who declined to be identified.

Speculation that Ford is planning to sell its Swedish brand Volvo -- possibly to a Chinese automaker -- was triggered by a report in Sweden's Dagens Industri business newspaper early this week.

A spokeswoman at Volvo declined to comment on the rumors.

Volvo Cars announced this week that it would cut 2,000 jobs, mostly in Sweden, as efforts continue to stem losses at the premium car brand.

Ford Motor considered selling Volvo last year, but decided to hold on to it in November.

A Ford spokesman said this week: "We have been consistently saying since the end of last year that Volvo is not for sale. We are focused on improving Volvo's business results."

Related Article : Ford talks with SAIC to sell Volvo ?

[Source : Automotive News : Subscription required]

Ford talks with SAIC to sell Volvo ?

Ford Motor is in negotiations with a Chinese company to sell its Volvo cars division, the Swedish business publication Dagens Industri reported today on its Web site.

A Russian investor is also believed to be interested in acquiring the division, the report said.

Media reports have suggested that the Chinese company involved in talks is Shanghai Automotive Industry Corp.

A Ford spokesman said: "We have been consistently saying since the end of last year that Volvo is not for sale. We are focused on improving Volvo's business results."

Ford's new major shareholder Kirk Kerkorian, with a 6.49 percent holding, has stated he would like to see the cash strapped U.S. automotive giant divest itself of Volvo which it acquired for 50 billion Swedish crowns in 1999.

Ford's CEO Alan Mulally began a strategic review around a year ago with the sale of Volvo thought to be among his goals. However the company has denied this.

A number of automotive companies have been connected with a purchase of Volvo over the last year, including Germany's BMW and Japan's Mazda.

The Volvo brand has shown good growth over the last few years in Europe, and has a revamped model line-up.

However, in the U.S. market, Volvo has skidded under exchange rate pressures, triggering several years of sales declines. Rather than reaching for a hoped-for goal of 200,000 North American sales by 2010, Volvo is instead trying to stop a slide below 90,000 units.

In response, Volvo calling on many unprofitable U.S. dealers to walk away from the franchise, an effort expected to cut about 20 percent of the dealerships by the end of the year.

[Source : Automotive News (Subscription required)]

SAIC plans to resume making UK sports cars

MG TF -- Made in China

Shanghai, China - June 17,2008 -- SAIC Motor plans to resume production at its British plant in August making MG-brand sports cars, its president said today.

All new MG TF ( Illustrated)

SAIC will start selling British-made MG TF sports cars in the UK, via more than 40 dealers, at the end of August or in early September, Chen Hong said at a shareholders' meeting.

[Source : Reuters via Automotive News Europe (Subscription required)]