MG born again at Longbridge? Not yet, but some encouraging news... at last.

It's true that the TF is pretty much a 14 year old design with nearly all of the parts brought in from China, and that isn't a sustainable operation beyond the very short term. Indeed, assembling cars in China using robots and by hand in Birmingham seems to defy some basic laws of comparative advantage and has left me scratching my head as to how this will work.

Furthermore, after StadCo's pull out a few months ago, as discussed in earlier Post blogs, what seems to be happening at Longbridge is - for now - little more than a screwdriver operation. As a result, few linkages with local suppliers are being built and there is much less in the way of local economic development than we'd hoped for.

And yet. The fact that MG TF production has apparently restarted (I say 'apparently' as no one has actually been allowed in the factory to see) does come as a considerable relief after lengthy delays given concerns over the quality of parts coming from China, and much speculation that it simply wasn't going to happen at all.

When StadCo pulled out a few months ago, Shanghai must have looked long-and-hard at whether TF production was still a goer. That they have decided to go ahead is in part about them saving face. They said they would do it, and want to be seen to sticking to a promise. This is important in Chinese business.

Of course, they also want to associate the MG brand with the heritage of British racing car craftsmanship so that they can sell the cars at a premium price (although £16,000 does seem a bit hefty for such a dated model). Reconnecting with the positives about MG is indeed important and needs to be backed up by decent quality and moreover by new models pretty quickly if the brand isn't to be tarnished.

And therein lies some hope. By going ahead with limited TF assembly, Shanghai are in effect signalling their commitment to the Longbridge site. Their plans for the site seem to include an R&D centre (much of Shanghai's R&D is currently at Leamington Spa where Shanghai has developed a medium sized car in cooperation with Ricardo). This is the model that MG Rover was working on before it went bust and which Shanghai bought the IPRs to back in late 2004.

This model is about the be launched in China under the name 'Roewe 550' (for images click here) and a 'more aggressively styled' (read better looking) MG version is on the cards for Longbridge for 2010 we think. Beyond that, a new MG TF based on the MG / Roewe 550 platform is possible (for impressions click here). Government support, through launch aid, within EU state aid rules, could help things along.

A combination of R&D and reasonable volumes of local production of genuinely new models (perhaps in the 50,000 - 100,000 range) along with a decent level of local sourcing really could bring benefits to the city and the region. Whilst Shanghai has said this is what they intend to do, much more clarity around timescales, volumes and the number of jobs to be created would be very welcome.

This, of course, gets us back to the need for a better relationship with the media and local agencies. MG TF assembly finally restarting, even in a such a limited way and on such a small scale, really is good news. Further clarity about the next steps for MG at Longbridge is now needed.