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MGF in America: The Real Reasons Why Not

To: MGDIGEST <mgs@Autox.Team.Net>
Subject: MGF in America: The Real Reasons Why Not
From: David Knowles <dknowles@uk.b-r.com>
Date: Fri, 7 Nov 1997 16:00:00 -0000
The reasons why the MGF hasn't come to the US are nothing to do with its
ability to meet Federal Safety & Emissions laws (it meets and exceeds
most of them), and you can bet that, despite what the good people of
Spartanburg might say, the existence of the Z3 would not be a real
factor in determining whether or not to sell another sports car line in
the USA.

The MGF was conceived pre BMW, when money (from asset stripper BAe) was
tighter. The body shell manufacturing deal with Mayflower (who build
Land Rover Discovery and Plymouth Prowler bodies) was a way to spread
the financial investment, but the cost of this decision was to limit the
output volume and rate. A conscious decision was made not to sell the
car in the US, because of the high set-up costs involved (dealers,
servicing, marketing etc.) and so production was targetted at lower
volumes. It is also true (I have this from the horse's mouth) that the
MGF wasn't liked that much in US clinics. but it did well in Europe,
where the road space and other cars are generally more compact.

As a direct consequence of this, the manner in which the car would be
built was determined at the outset - materials, production line
techniques etc. - and the unit cost was higher as a result. Cars are
very cheap in the US, relative to other markets, and so the profit
margins are much tighter. Mazda can squirt out high-volume Miatas
relatively cheaply, but the downside is that a drop off in sales would
lead to idle plant which cost millions in the first place.

The fact is that it is easier to increase output of a low volume car
than to reduce output of a high volume car; that is the sort of risk
that every manufacturer must assess at the planning stage. To build the
MGF in much higher volumes, to bring the unit cost down, you would have
to have a fundamental rethink - bodies might be made differently (in
house at Rover, with less separate panels, more robotics), different
plastics might be selected (high pressure injection moulding, multiple
machines, different sub-contractors), other high-volume components might
be substituted and so on.

As for the BMW picture, the fact that the MGF is so different to the Z3
was a great help; Rover insiders do suspect that if the MGF had been
more traditional, there might have been more of a problem, although the
fact that the Z3 is geared for the USA and the MGF isn't must also be a
help in avoiding too much in-house rivalry. At the Frankfurt Motor Show,
BMW was making great play of the fact that with the Z3 and the MGF it
has cornered the biggest slice of the sports car market pie. Future
MG's, however, will be looked at within the overall BMW group policy.

So the MGF, in its current form, isn't likely to go stateside - but as
for a future MG, BMW has already stated that things will be different.
As to whether or not it will be an MGG - your guess is as good as mine!

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