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When Two Tribes Go To War – SAIC V’s Nanjing Autos

In 2018 China Car Times was acquired by Autowise. This article originally appeared on ChinaCarTimes.com.

Chinese Car News, Nanjing MG, Roewe, Shanghai Automotive Industry Corporation | AshApril 1, 20071:12 pm

Back in 2005 when the MG Rover group was busy being courted by the two Chinese automotive giants SAIC and Nanjing Autos, SAIC bought the technical rights to two models, the Rover 25 and the Rover 75 for 67 million pounds as well as the Rover powertrain K series of engines. Nanjing Autos on the other hand got everything else that MG Rover had to offer for only 53 million pounds. SAIC vowed to sue anyone (and we mean anyone) who produced anything based off the old Rover 75 designs. Fast forward to 2006, SAIC pushes its own Rover 75, the Roewe 750 (and a hybrid) fast forward again to March 2007 and Nanjing MG is busy nursing its own creation, the MG7 also based off Rover 75.

Now its all kicking off with threats of law suits, and counter arguments

THE intellectual property rights dispute between Nanjing Automobile Corp and Chinas leading car maker Shanghai Automotive Industrial Corp has resurfaced following the launch of the formers MG 7 series this week.

Nanjing Autos MG 7 is considered a rival to the Roewe 750, a Rover 75-based sedan unveiled in October last year by SAIC as its first own-brand high-end model.

The problem lies in the fact that the IPR of both the Roewe 750 and the MG 7 is derived from the original Rover 75 model.

Nanjing Auto outbid SAIC in 2005 to acquire the failed British car maker MG Rover Group and its engine producer for 53 million pounds (US$103 million).

But SAIC bought the technology for two Rover models the 25 and 75 and their engines for 67 million pounds in 2004.

According to the technology transfer agreement between MG Rover Group and SAIC, SAIC owns the IPR to the 25 and 75 models and any company must get approval from and pay SAIC for the use of the technology, yesterdays Shanghai Securities News quoted an insider close to the deal between SAIC and MG Rover as saying.

But Nanjing Auto disputed this view, saying it owns the IPR over the patent license because it is the actual purchaser of the British company and not SAIC.

Zhang Xin, the head of the MG project, said: The difference between the two cars is that Nanjing Autos MG 7 is a pure English breed.

SAIC declined to provide a detailed comment on the issue but a spokesman said: Looking at the legal documents, it is clear who the IPR owner is. What SAIC is focusing on is the development of its own-brand models and we hope Nanjing Auto will also do a good job in developing its own-brand models, he added.

An asset sales agreement signed before a companys bankruptcy is protected by the law, said Bill Fisher, executive vice president of AmAsia International Inc, the leading importer and distributor of Chinese automobiles to North America.

Fisher issued a warning to future overseas distributors of the MG 7 to be aware of the risks of IPR disputes.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world’s biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the ‘Website’ link.

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2 Comments so far, please add your thoughts!

  1. dragin says:May 8, 2007 at 2:10 am

    Bill Fisher, executive vice president of AmAsia International Inc, the leading importer and distributor of Chinese automobiles to North America

    Whoops..I think not.

    Reply

  2. Liam says:June 10, 2007 at 10:02 pm

    Despite Roewes more extensive exterior re-design the MG 7 is built with more care and has a better feel of quality. Auto Express gave the 750 3 stars and the MG7 4. Also the 750 only has 2 airbags standard, compared with the MGs 6.

    Reply

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