Although Chinese automaker Nanjing Auto Group Co. bought the intellectual property of defunct British automaker MG Rover, it still may not be able to enter the crowded European auto market thanks to a Dutch administrator.
Evidently the 2005 acquisition only covered the designs, and an English plant, which has since been crated and sent to China. However, Nanjing may have only received rights to use the MG trademark in Britain and not elsewhere if the claims of a Dutch administrator Anthony Terng are true.
Terng, administrator of MG Rover Nederland, asserts that the insolvent Dutch unit still owns the MG marquee in France, Germany and other parts of Europe, according to reports from various European news outlets. Although Nanjing claims it owns the trademark outright, it reportedly offered to buy the rights from Terng, who dismissed the initial bid as too low. However, Terng has agreed to meet with Nanjing reps to hammer out a sale before soliciting bids from others. The most likely spoiler would be Nanjing's chief rival Shanghai Automotive Industry Corp.
Nanjing beat SAIC to buy the plant and the MG nameplate in July 2005 with an $87 million bid. Even though Nanjing beat SAIC for the MG assets, MG Rover's parent, BMW, sold the Rover brand and designs to SAIC, which has since been forced to change the brand name to Rowe because of concerns from Ford Motor Co., the owner of the Range Rover brand of sports utility vehicles. The disjointed sale of MG Rover last year had prompted speculation that the two Chinese rivals might merge, instead they both continue to go their separate ways and continue to harass each other any chance they get.
However, should Terng sell the continental European rights to the MG brand to SAIC, and Nanjing lacks any legal recourse, it maybe forced to put aside its differences, and accept a merger with SAIC after all.—Matthew Wurtzel
See story from AFX via Forbes.com
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