By Li Tiezheng

On September. 19, SAIC Motor Corporation Limited and Ford Motor China issued their statement respectively on the matter of buying the Rover brand name from BMW AG, making clear the hot topic in automotive industry that once led to speculations.

SAIC Motor Corp. declared three points in its statement:

"Firstly, SAIC Motor Corp. has always been following the internationalization development strategy at a high starting-point. Our first independent product, being developed with the cooperation of SAIC's overseas research and development group (Europe), on the basis of the entire intellectual property rights of the original Rover 75, will be better in the technology and quality than the original one. Rover has certain reputation and cognition in overseas market, and to some extent has the same taste and quality with our products. If we adopt Rover brand name, our exploitation process in the overseas market will be shortened. Considering its influence in the overseas market, we have had negotiation with BMW AG about the Rover brand name. But we believe that the establishment of a brand is based on consumers' feelings about the product and the service.

Secondly, in domestic market, based on our market cognition and target market orientation, we will, in accordance with set brand strategy, create a new medium-high class brand for our target consumption group, endow it with new brand connotations and orientation, and offer Chinese consumers entirely new products and services.

Thirdly, the independent projects of SAIC Motor Corp. are going smoothly at present. According to the plan, in early October, we will publicize the first internationalized brand name of the independent projects in SAIC Motor Corp., and will release the first product later, which will go on sale in domestic market at the end of the year."

In the statement of Ford Motor China, it was said that "In 2000 when Ford Motor Company bought Land Rover from BMW AG, Ford also asked to buy the Rover brand name, but BMW had no intention to sell at that moment. Therefore, the two sides signed 'Trade Mark Co-Existence Agreement' which specified that Ford company had the prior right to buy the Rover brand name, that is to say, if BMW has the mind to sell the Rover brand name in future, Ford will have the preemption. Earlier in this year, BMW informed Ford its intention to sell the Rover brand name, and Ford could exercise its right to buy within 90 days as stipulated in the Agreement. In order to protect the Land Rover brand name all over the world and for the consideration of future business development, since 6 years ago when the agreement was signed up, Ford Motor Company has been always considering that it is crucial for Land Rover to hold the Rover brand name. Therefore, we notified BMW formally yesterday (September 18, 2006) that we would exercise our preemption to buy the Rover brand name."

Rover was a long-stand auto brand, born in the 1940s. Until 1994, its owner - British Rover Group - has been sold many times and finally was merged by German BMW AG. In 2000, BMW divided Rover Group by selling Land Rover to Ford and transferring Rover and MG saloon business to British venture investors, and restructured MG Rover Auto Group Co. Ltd. (MG Rover for short). BMW transferred the MG brand name to MG Rover company but still kept the Rover brand name and authorized the production of MG Rover.

In 2004, Shanghai Automotive Industry Corporation (Group) purchased the passenger vehicle production technology of Rover when negotiating with MG Rover company over the possibility to set up a joint venture company. In 2005, MG Rover failed in the negotiation with Shanghai Automotive Industry Corporation (Group) over the joint venture issue, and then the company went into bankruptcy management.

Later, Nanjing Automotive purchased the assets of MG Rover and stopped it from bankruptcy. The assets include factory, facilities (facilities for producing Rover passenger vehicle) and MG brand name and MG automotive technology.

In 2006, after negotiation with Shanghai Automotive Industry Corporation (Group), BMW decided to sell Rover brand name. Therefore, within 90 days after receiving the notice from BMW (Sept. 27th being the deadline), Ford has the priority to buy Rover brand name as stipulated in the Agreement signed 6 years ago. Some expert stated the result of the case of buying Rover briefly: two Chinese automotive companies and one American automotive company bought three things from British automotive company; Shanghai Automotive bought the software for producing Rover, Nanjing Automotive bought the hardware for producing Rover and MG brand name and production technology, and Ford purchased the Rover brand name.

It is this result that caused various discussion and conjecture. Against such discussion, a insider of SAIC Motor Corp. disclosed that SAIC had already known Ford's priority in buying the Rover brand name. Though SAIC wanted to buy the Rover brand name as well and has negotiated with BMW over the issue, it hadn't determined to win. SAIC believes that they will create an internationalized independent brand on the basis of already-purchased software someday in future, and will go to the world along with the weight of China's automotive market within global scope; Rover brand name is really not the matter.

Nanjing Automotive kept silence on this. It's analyzed that by using the purchased Rover facilities, Nanjing Automotive are producing MG cars, and have nothing to do with this. However, Ford said definitely that as Rover has the same origin with their Land Rover, they would exercise their priority to buy the brand to avoid any possible trouble in future.

Professional analysts reckon that the acquisition among enterprises is pure business. The buyer and the seller have their own intention and goals. As for the result, no matter who will win profit and who will lose, the two sides and market competition will decide; and it's none of others' business.