Chinese automaker plans U.S. assembly plant

updated 6:48 p.m. ET July 12, 2006

OKLAHOMA CITY - The MG, which gained a reputation in the 1960s as a good-handling, affordable English sports car, will take on a new life under a Chinese company that wants to resurrect the automotive brand in hopes of appealing to a new generation of car buyers.

Nanjing Automobile Corp., China’s oldest carmaker, announced Wednesday plans to locate a manufacturing facility and parts distribution center for the car at the Ardmore Airpark in south-central Oklahoma. This would be the first Chinese automotive plant in the United States.

In formalizing an announcement the company made earlier Wednesday, Duke T. Hale, chairman and chief executive officer of Nanjing’s MG Motors North America/Europe Corp., said the strength of the MG brand name will help sell the sporty vehicle.

“Owners clubs and enthusiasts are all about the brand,” he said. “They are all about driving an MG.”

A version of the MG was produced in England until 2005, when MG Rover collapsed. There has not been a new version of the MG sold in North America in 26 years.

MG Motors plans to offer a full range of sports cars and sedans. The Oklahoma plant will produce a newly designed TF Coupe. The rear wheel drive two-seater was designed by MG’s former owners but never built.

After viewing an artist’s rendering of the coupe, David Healy, an automotive industry analyst for Burnham Securities, Inc., said it could be difficult for Nanjing to break into the competitive North American market.

“It’s a generic sports car,” Healy said, “and it’s going to be competing in a crowded field.

“They need something other than the MG label to go with it. If they have something new or different, it will fly very well, but if it’s just 5 more horsepower or half a second less on zero to 60 than the competition, they’re in a dog fight.”

Three sedans will be built at Nanjing’s facilities in China and the MG TF roadster will be built at the former MG Rover Longbridge assembly plant near Birmingham, England.

Hale said Ardmore will be an excellent location for a distribution center because it has rail access, the city’s airpark has ability to handle large aircraft and Houston can be used as a port.

“Ardmore and the airpark truly is a logistical, distribution dream,” Hale said.

Oklahoma City will be the site of the company’s global headquarters for sales, marketing and distribution outside of Asia. A new research and development facility will be housed at the University of Oklahoma in Norman.

“We can take those junior level, senior level, graduate level engineering students that have interest in automotive and give them practical experience,” he said. “We are going to give something back to the community, not just take.”

At full capacity, the assembly plant at the Ardmore Airpark will employ about 325 people, the global headquarters in Oklahoma City will employ another 150, and an estimated 35 will work at the research and development entity in Norman, for an estimated annual payroll exceeding $30 million.

All three of the Nanjing’s locations in Oklahoma are expected to qualify under the state’s Quality Jobs Act, which allows for quarterly cash payments of up to 5 percent of the company’s payroll for 10 years, said Amy Polonchek, executive director of Oklahoma’s Department of Commerce.

The state also is planning to spend $15 million for improvements to the Ardmore airpark from a newly created business development fund, and will provide free startup training for its employees through its CareerTech program, Polonchek said.

“So Oklahoma, a great place to be, in fact I said just the other day, I think it may be from a business, commerce perspective the best kept secret in the U.S.,” Hale said. “I mean when we compared yourselves in the total state offering to other states, man, I can tell you the incentive package offered by the state is superb.

“We got a good package. It was a key component in our decision to move to Oklahoma.”

MORE FROM AUTOS

Autos Section Front

CEO lays out ambitious Chrysler road map Cars are approaching ‘auto’ pilot mode Review: Toyota Venza falls short What automakers have in store for 2010 Ford to put air bags into back seat belts Clunker deals: old Ford pickups for new ones New Dodge models part of Chrysler’s plans U.S. rips Toyota statement on floor mats GM posts first sales gain in nearly two years General Motors board decides not to sell Opel Autos Section Front   Add Autos headlines to your news reader: