MG has ceased production of cars at its Longbridge plant, five years after the brand started producing cars there once more.
Production now takes place in China, ending MG's UK-based finishing production. The move has been under consideration for as long as two years, according to MG's head of sales and marketing, Matthew Cheyne.
Read our thoughts on the shutdown of Longbridge here
Cheyne explained that there were many reasons for the relocation, but the main reason for the decision was MG looking to streamline its production process because its UK plant's production output could not compete with its larger, more modern facilities in China.
"Small volumes aren’t economically viable at a site of Longbridge's size. Elsewhere in the world we have state-of-the-art facilities, so it's more cost-effective to import and build them elsewhere. There was no efficient way to carry on doing it in the UK.," Cheyne explained.
Despite the loss of 25 jobs at the Longbridge plant, the MG facility will still continue to employ more than 300 people, with new recruits having been taken on in other areas of business. MG's development of its model range will continue to be UK-based though, as Cheyne revealed the company's investment in a new £1.2million test-bed for new models. Sales, marketing and aftersales are also here to stay.
The move away from UK production is also partially due to the UK's vote to leave the European Union, according to Cheyne. He explained that since the value of the pound dropped following the Brexit vote, the cost to MG of producing its product range rose, rendering the production operations in the UK no longer cost-effective.
Alongside the move, MG is also starting a new initiative to build a more global product line-up, rather than starting with a car destined for international markets, then re-engineering and designing it to fit into the UK market. Cheyne also denied that the move would have any impact on the price of MG cars, given the economic benefits of moving production overseas.
According to the BBC, the move has drawn criticism from local Labour MP for Birmingham, who dubbed the pull-out “hugely disappointing and premature”.
MG's market share, according to the most recent set of official industry statistics, was 0.12% in August this year.
The news of the wind-down of production comes just one day after the SMMT announced a 14-year high for UK car production figures for August, although MG's limited domestic sales mean that this is unlikely to be considerably impacted.
Cheyne explained that the move would not affect MG's upcoming product plans, including the production of a new small SUV to sit below the brand's current GS SUV. He remained optimistic about MG's future in the country, stating: "Going forward, we have the availability for production to build in China and other markets. We're part of a massive global company, which we haven’t been taking advantage of, which we now can."
Production at the Longbridge plant re-started in 2011, following a 16-year hiatus after Rover and MG went under in 2005.
