It's one of the most unlikely alliances you'll come across in the car business - China's oldest car maker, Britain's most historic sports car brand and an Oklahoma factory. A tie-up that has eyebrows raised throughout the industry.
But that's what was unveiled last week when Nanjing Automobile Group said it would become the first Chinese company to make cars in the United States when it starts building a redesigned MG TF coupé under its acquired British brand, MG, at a plant in Ardmore, Oklahoma, in 2008. The plant will be able to build between 12,000 and 16,000 cars a year. The rear-wheel drive two-seater was designed by MG's former owners but never built and it will be the first new MG model to go on sale in North America for a quarter-century.
This will be the brand's third manufacturing site, joining Longbridge and Nanjing, and no one really knows why Nanjing Auto is building the car in Oklahoma.
In the 1960s, MG Rover turned out 40 per cent of the cars bought in Britain but had been troubled for many years, changing hands many times with owners including Honda and BMW, until production ceased in April 2005 and all 6,000 workers at Longbridge were let go.
Nanjing Auto, which is owned by the state government in Jiangsu province, paid €70 million for the MG brand, the Longbridge plant and Powertrain, MG Rover's engine arm, last year.
Despite market expectations, Nanjing beat out fellow state-owned rival and China's biggest carmaker Shanghai Auto. Early this year, SAIC announced plans to sell over 200,000 own-brand cars annually in 2010, with 45,000 going to overseas markets, including Europe.
Longbridge closed when MG Rover collapsed but is due to reopen in 2007 to assemble the MG TF roadster, while the Nanjing plant will begin manufacturing the MG 75 sedan next year.
The American market - the world's biggest - is the glittering prize as far as China's carmakers are concerned and both Chery Automobile and Geely Automobile are tipped to try and break into the market with their own brands, but have no plans to produce cars there.
Nanjing Auto, which makes own-brand light-duty trucks and low-cost cars in Nanjing and nearby Wuxi, is a big player here in the former Chinese capital but its fortunes have been mixed for recent years due to sluggish sales - it lost an estimated €40 million last year, while sales fell nearly nine per cent year-on-year to 54,963 vehicles in the first half of this year, despite buoyant growth in the overall domestic market.
This means it does not have the deep pockets for its foray into the world's most challenging car market. Where Nanjing scores above its rivals in China is that it owns an established brand with a Western following. The reaction in China has been sceptical, with industry experts scratching their heads as to why Nanjing chose to build in Oklahoma rather than at Longbridge.
The plant will create 550 jobs which will go some way towards offsetting the closure of a General Motors plant in the region last February and tax breaks from the state of Oklahoma, combined with a new business development fund helped sweeten the deal. Also, the state will make €12 million in improvements to the Ardmore airpark.
Yale Zhang, a Shanghai-based manager of US auto consultancy CSM Worldwide Corp, told the China Daily: "It's astonishing. I can't understand why Nanjing Automobile has decided to build a new plant in the US for MG, a small-volume brand, since it already has two factories."
Jia Xinguang of the China Association of Automobile Manufacturers said Nanjing's decision was "a big mistake".
"It's not worth investing heavily in the US for MG, as there are only a small number of MG fans and competition is very tough," said Jia.
The newly inaugurated US wing of Nanjing MG Motors remained upbeat on the brand's prospects. Duke Hale, a former executive at Mazda, Isuzu and Lotus, is chairman and chief executive officer of Nanjing's MG Motors North America/Europe business and he believes the strength of the MG brand name will help sell the sporty vehicle.
"Owners clubs and enthusiasts are all about the brand. They are all about driving an MG," he said. "We don't want to be a company that simply exports out of China. We don't want to be seen as just another Chinese car company."