Rover's Return? Not quite, but still good news for Longbridge.
News in the Post today (read Duncan Tift's article here) that Shanghai Auto (SAIC) remains committed to the Longbridge site comes as welcome news given the uncertainty created in the wake of the recently announced StadCo pullout from MG TF production.
That MG TF production will finally restart in July this year also comes as some relief after lengthy delays given concerns over the quality of parts coming from China.
Let's get things in perspective, though. The TF is basically a 15-year old design with nearly all of the parts brought in from China. It is not a sustainable project beyond the very short term. And with StadCo leaving, we now basically see a screwdriver operation with very few linkages into the local economy and fewer benefits than we'd hoped for in terms of economic development.
That Shanghai are going ahead at all is the crucial thing, though. This keeps them interested in a site whether further production and R&D may come in time. It's here where the case needs to be made to SAIC. And there is a strong case to be made.
Indeed, despite recent plant closures, the West Midlands remains the heart of the UK car industry.
Of particular relevance, after Shanghai bought MG Rover's intellectual property rights in late 2004, it continued to develop the replacement for the R45 through its joint venture with Ricardo here in the West Midlands.
This is now well advanced and the Roewe 550 as it's called in China was unveiled at the recent Beijing motor show (for images click here). An MG version (preferably with a better looking front end) could be produced both in China and at Longbridge. The latter really could bring benefits to the area. Launch aid, within EU state aid rules, could encourage such production being brought to Longbridge. A replacement for the aged MG TF is the next priority. Ricardo could again be a key partner here.
There is also a strong case to be made for Shanghai locating its European R&D base here, especially in environmental technologies where the West Midlands has a real lead (for example see an interesting piece here on the development of electric taxis in the region).
A more imaginative vision for the old Longbridge site (featuring environmental technologies, education facilities, an eco-town...) could actually attract R&D from SAIC. Tackling climate change and reducing car pollution is a key challenge for the future. Tougher European CO2 emission targets are on the horizon and manufacturers will need to invest heavily to meet these targets. Ford realised as much when it invested ÃÂ£1 billion in the UK in environmental technologies back in 2006, much of it at the time here in the West Midlands. SAIC could similarly tap into such expertise.
In the short-run, EU regulations will impose extra costs on manufacturers in Europe. Longer-run, though, they could well stimulate new technologies and processes that could give manufacturers in Europe a competitive edge as the rest of the world catches up on the need to tackle climate change. That offers an opportunity for the West Midlands, and for Longbridge, if the investment (both domestic and foreign) can be encouraged in the region. Again, there is a role for government here in stimulating and encouraging this.