SAIC, the Chinese company that bought the intellectual assets of MG Rover after declining to continue their joint venture, is lining up investors to develop the products. It has the rights to the old Rovers 75 and 25, along with the engine range, which it is returning to the market under the Roewe banner. Now the company is issuing convertible bonds worth around $1bn so that it can move its Roewe brand along with new products. The bonds may ultimately bring in $2bn of investment funding.

SAIC requires $250m for new commercial vehicle platforms and another $500m for its finance unit and the repayment of debts. SAIC needs over $1.5bn for the coming years to establish Roewe as its in-house brand alongside the vehicle assembly it operates for its joint venture partners, GM and VW. Developing the Rover 75 into the Roewe 750 has proven a challenge since the production capability had to be rebuilt from scratch. The KV6 engine presented difficulties due to the innovative production system Rover had concocted for it and the need to bring it up to Euro IV compliancy.

In its continuing joint ventures with GM and VW production has been rising at a healthy rate. Last year it was the biggest vehicle producer in China with 1.2m units, of which 915,000 were passenger cars and ‘light duty’ vehicles. Profits are up 300% for the first six months of 2007 and on target for around $1bn for the full year with total sales rising to over 1.5m units. The 750 was released to the Chinese market in March and has sold 7,632 units in the four subsequent months. This is respectable given that the Roewe brand entered the market from a standing start. The company is now discussing raising production capacity to 270,000 cars a year and 300,000 engines a year, or around 50% more than MG Rover ever achieved. There is no indication yet whether the other Rover model, the 25, will also return but SAIC Motor UK is leading the R&D on the new medium size car, a continuation of the work MG Rover was doing and based on the 75/750, which will be launched sometime this year. The facility is also conducting preliminary work on a new small car as well as a new family of engines.

The enormity of the work that is being conducted does not seem to have put off NAC, the purchaser of MG Rover's physical assets. On August 28^th it is releasing its version of the 75, which they have called the MG7 and MG7L for the short and long-wheelbases. There will be two engine sizes, the KV6 again and a K Series four cylinder 1.8-litre, although the updated Euro IV engine family is now known as the N Series. Prices range from around $30,000 to $40,000, which in China is just below Audi A4 prices.  There is good information that production will also take place at the UK Longbridge site, and the station wagon version is being assessed for production but not yet confirmed. The old Rover 25/MG ZR is due to go back into production as the MG3 and there is the possibility that the old 45/MG ZS will return as the MG5, although when one was shown as a ‘concept’ it exhibited precious little advance over the original. The TF sports car is being resurrected under its old name and although production is promised for Longbridge the start date appears to have slipped back to January. Furthermore, NAC is planning to supply its first European market, Spain, from its base in Nanjing rather than Longbridge