Kevin Wale, head of GM China, confirmed what we had intimated a month ago: GM wants to give their Chinese joint venture partner SAIC access to GM’s sales network in the UK. “We have agreed in an MOU that we would discuss the potential for MG to be distributed in the UK,” said Wale to Reuters.
If the deal is signed, it would be unprecedented. No Chinese company so far has gained access to the distribution network of their joint venture partner. The mere idea would send shivers down automaker’s necks. China, the carbuilding monster (this year: 18 million) has pretty much been kept in its Chinese box. Western automakers have done everything to keep a lid on it. The only exports are small scale, by China’s relatively small independents, such as Chery, Geely, or Great Wall.
MG in a Vauxhall network would be something drastically different. SAIC’s MG would gain immediate brand cred and respectability. Also, the way the European market is structured, this won’t stay a solely UK deal for long. A car that is legal in the U.K. is legal anywhere in Europe. Opel dealers all over Europe can demand MGs, and it would be hard, if not impossible to say no. Once MG is established, SAIC, China’s largest manufacturer, can follow with more own brand product.
SAIC plans to start making MGs in the UK by the end of this year and sell them across the European Union.
In the eyes of most European automakers, this is a nightmare scenario, something they have fought to prevent for years. GM makes it happen.
SAIC must wield considerable power over GM to get such a deal. At least, Wale said no discussions have been held on sharing GM’s dealer network in North America. Which doesn’t mean that they won’t be held in the future.