Morgan car import to China The process of importing Morgan cars has now begun in earnest. On the 11th March the 6 Morgan cars, which comprise the first commercial consignment, docked in Tianjin after some 42 days at sea. On 19th March Erika and I traveled to Tianjin to drive the cars out of the containers. The Customs port is a vast warehouse complex on a spit in the Bohai sea. There are rows of cars waiting for clearing, or collection from this tax free zone. The amount of paperwork required to clear these cars is daunting. Prior to their arrival we had to demonstrate that we have a level 2 service partner, which includes registered paint shop. Our service partners in Beijing don't have a paint shop, but our customs agent has one that we can use. The Certificates of Conformity have to be completed which list all the details of the cars. I am concerned about the engine numbers being inconsistent. MMC say that the numbers are not all the same format - I can't believe that BMW's sometimes have 8 and sometimes 12 digits. If this isn't right - the Plus 8's will be held up in customs due to an administration error which could have been avoided. Every day in customs is chargeable. Our first issue has been the Vehicle Identification Number on the chassis of the cars. Modern-day Vehicle Identification Number systems are based on two related standards, originally issued by the  International Organization for Standardization (ISO) in 1979 and 1980; ISO 3779  and ISO 3780,  respectively. Compatible but somewhat different implementations of these ISO standards have been adopted by the  European Union and the  United States of America.   Apparently China appears to be adopting the VIN used by the USA, and we may have to recalculate all the VIN's for our cars.  

It is quite easy to understand why there is a lot of cash in the Chinese banking system; it is required to inject a great deal of cash to start  a company, it can only come from designated sources, and taking the money out of ones own accounts is onerous. Bank of China The Bank of China declared our Capital Account open on 14th November, the account for foreign funds to be injected to the Chinese Wofe. A foreign investor must inject 20% of their working capital into this capital account within 3 months of company incorporation. In our case Sept 12. I have therefore just under a month to inject US$160,000. I made an expensive mistake in our incorporation documents - for some reason I nominated the currency as US$ instead of GBP. I have had to use GBP to buy US$ in HSBC Hong Kong to remit to Beijing Bank of China funds which will be converted to RMB. When I remit funds to Morgan Motor in the UK, it will have to be in GBP. An expensive lesson on reading the fine print. To make payments to Morgan Motor Company (MMC) is an exercise in patient paperwork, which is not my forte. The Bank must have our dealer agreement, duly chopped (it is emboss stamped not ink chopped which is causing an issue), and car invoice precisely with the names of the bank accounts, two companies and dealer agreement all matching. If I ever start another company, I will ensure that the company name is very short and easy to spell - Malvern Morgan Cars (Beijing) Co. Ltd. was too long for the HSBC internet banking forms and the absence of the final 'd' meant that the funds were rejected by the Bank of China. Once we have injected the funds required we can proceed to the capital verification stage. This is to prove that we have invested the 20% of our registered capital. The balance is required over 3 years. This procedure takes 6-8 days. With this verification we can then apply for the import license for the cars from Morgan. This money can then be transferred to our RMB current account for certain types of usage including renovation, salaries and inventory. Assuming that we one day make a profit, the repatriation of this money and exchange for foreign currency will be another exercise in patience. As we are a long way from profitability or cash flow positive, I shall worry about that later. Today the showroom work was allowed to start again after the Communist Party Congress. Our appointment as dealers for Morgan cars was November 2011. I had submitted our request to be dealers in December 2010. The wheels of industry are rolling, but not not at great speed. New Proud Owners Meanwhile the saddest part of all was the departure of our beloved Roadster. In order to finance the business I had to take the decision to sell her. As a foreigner we can only bring in US$50,000 per year and my investment in the Morgan business exceeded that long ago. Only now with the capital account could we bring in sufficient money for our investment in the roadshow, showroom rental , legal expenses and paying our own living expenses. We had believed that she was the first Morgan in China, only to find that there was one which arrived 6 months earlier in Beijing belonging to a Chinese pop singer called Yang Cun. As the pregnant woman eased into the Roadster, memories of Amity and Halo in the back seats, and Erika laughing as we sped through the Britanny countryside with the roof down came flooding back, enough for my eyes to swell. Erika overhead the man driving the car make a comment about the length of the bonnet, only for the woman to say, "it is no longer than the tractor you are used to driving." It isn't only the rich and famous who are going to be driving Morgan cars in China.    

The process of setting up Morgan Cars Limited for the sale of the fabulous British motor cars has taken its toll in terms of time, money and stress; today we received notification in writing that our application has been approved. We submitted the documents on the 1st February of 2012 and the process has been clear, transparent and thorough. Unlike setting up a business in Singapore or the UK where the investors are at risk of their own entrepreneurial zest, the entrepreneur in China has to satisfy the various ministries that their business is genuine, likely to succeed, and will preserve the well being of the employees. In some senses this is admirable and certainly the requirement for a business plan means that the business has to be thought through; which may even save some failures. However, it does mean that a startup in what is considered a 'strategic industry' ie. automotive, is not for the hasty nor the well funded. Still, that in itself does create a barrier to entry which will be a saving grace. Having operated service and internet companies since 1995 whereby a url and a bank account create the impression of a credible business, sinking my teeth in to the costs of the showroom, stock and government investigations of my working capital has been something of an eye opener. Running a Pr agency is like sailing a dingy, an auto company like piloting an oil tanker. Still it is good to keep challenging oneself. There is still, of course, plenty more to learn. Following on from the MOFCOM approval we still have the  below which  cannot be done in parallel, for each step is the prerequisite of the next step: 1.       Certificate of Approval: MOFCOME 5-10 working days 2.       Business License: online application and reservation with AIC is up to actual situation, then business license is issued in 5 working days 3.       Public Security Bureau Filing and chop making: 5 working days 4.       Organization Code Certificate: 1 working day 5.       Tax Registration Certificate: 1-2 working days 6.       SAFE IC card: 20 working days 7.       Account opening: about 10 working days 8.       Capital injection 9.       Capital verification: about 10 working days 10.   Business license update and import and export licensing: about one month We also have another raft of documentation to then complete for the import license which allows cars to be brought into China for commercial resale. The site is all in Chinese and I now have to get that translated. Part of the excitement of this process is that it is of course, all in Chinese. Luckily I have Erika to hand who has great commercial acumen (being Shanghainese it appears to be in the DNA), and Oscar who is a trusted Man Friday from Beijing. The Showroom in Gongti has the designs as good as complete, and our demonstration cars will be back from Chengdu to grace the new showroom in the first week of October. This is of course as long as we are able to extend the ATA carnet for the cars by 3 extra months. Although Morgan gave us a 12 month carnet the Government in China only allows 6 months within the country - apparently because people have brought cars in for exhibition purposes on an ATA carnet only for the vehicles to never be seen again. In China the lack of trust at each choke point means that one simply can't take anything foregranted. If we can't get the extension then we shall have an empty showroom until our new stock arrives. For now, we celebrate the MOFCOM approval and will tackle the ATA carnet next week.      

The Year of the Dragon started with a roar for Morgan Cars in China. On the 1st Feb we moved into our new offices here in Beijing, and on the 6th Feb we submitted our our battery of documents for the 3 ministries for submission for the WOFE application. Once the WOFE, Malvern Morgan Cars Beijing Limited, is approved, then we shall be able to apply for the import license. This whole process will take some 4-6 months with good grace and well organized documentation. Our new office is in the Nexus SOHO on the east 3rd Ring Road of Beijing. We have taken a 12m2 unit which is neatly configured as part of a large serviced office.  The funds from HSBC left HK on the 18th Dec but weren't cleared by ICBC until the 3rd Feb due to the national holidays. In the meantime the Servoffice staff have been accommodating and let us move in before the funds were cleared. On the 3rd, within hours of moving in, we were up and running with entrance cards, wireless, phones, and access to limitless coffee and comfortable seating areas. The team at Lee & Lee have been superb at helping us to get all the documentation together. We had to collate documents from Morgan Motors Company in Malvern, HSBC in Hong Kong, a company secretarial firm in HK, and our own documentation from Beijing. HSBC in HK were very helpful and responsive to our needs for letter of good standing required by the Chinese authorities; helped by their long standing relationship with Morgan Motors. I thought it worthwhile for the sake of record to list the number of papers required. This is such a lengthy process in China  but one which appears to be all above board, transparent, and structured. For name pre-approval of Administration for Industry and Commerce (AIC) 1. Authorization Letter (signature) For Commerce Bureau ( MOFCOM): 1.     Namelist of Board Member (signature) 2.     Authorization Letter of Service of Legal Files (signature) 3.     Authorization Letter for Administrative Licensing Item (signature) 4.     Application Letter for Administrative Licensing Item (signature) 5.     Appointment Letter (signature) 6.     Feasibility study report (signature) 7.     Articles of Association  (signature) For Administration of Industry and Commerce: 1.     Certification of Incumbency for Board Member, General Manager or Supervisor (signature) 2.     Authorization Letter of Service of Legal Files (signature) 3.     Articles of Association (signature) 4.     BAIC Application Form (signature) For Public Security Bureau: 1.     Application for Chop-making (signature) For Code Bureau: 1.     Advice of Codes Pre-assigned (seal) 2.     Application Form (seal) For Tax Bureau: 1. Business License (seal) 2. Organization Code Certificate (seal) 3. Approval Certificate (seal) 4. Address Proof (seal) 5. Articles of Association (seal) 6. Passport copy of Legal Representative (seal) 7. Registration Form (seal) For Foreign Exchange Bureau: 1.     Foreign exchange registration application form (signature and seal) 2.     Business License (seal) 3.     Approval Certificate (seal) 4.     Articles of Association (seal) 5.     Organization Code Certificate (seal) 6.     Passport copy of Legal Representative (seal) 7.     Passport copy of finally holding person (seal) For Finance Bureau: 1.     Financial registration form (seal) 2.     Approval of Commerce Bureau (seal) 3.     Approval Certificate (seal) 4.     Approval Certificate (seal) 5.     Organization Code Certificate (seal) 6.     Tax Registration Certificate (seal) 7.     Bank Account Opening Certificate (seal) 8.     SAFE card copy (seal) 9.     Business License (seal) For Statistics Bureau: 1. Application Form (seal) 2. Organization Code Certificate (seal) 3. Approval Certificate (seal) 4. Business License (seal) The new address: Morgan Cars Limited (HK) B-16. 10th Floor SOHO Nexus Centre 19 East Third Ring Road Beijing 100022 Office: +8610 5735 1173 Email: drive@morgan-cars.com.cn Web: http://www.morgan-cars.com.cn    

The Year of the Dragon started with a roar for Morgan Cars in China. On the 1st Feb we moved into our new offices here in Beijing, and on the 6th Feb we submitted our our battery of documents for the 3 ministries for submission for the WOFE application. Once the WOFE, Malvern Morgan Cars Beijing Limited, is approved, then we shall be able to apply for the import license. This whole process will take some 4-6 months with good grace and well organized documentation. Our new office is in the Nexus SOHO on the east 3rd Ring Road of Beijing. We have taken a 12m2 unit which is neatly configured as part of a large serviced office.  The funds from HSBC left HK on the 18th Dec but weren't cleared by ICBC until the 3rd Feb due to the national holidays. In the meantime the Servoffice staff have been accommodating and let us move in before the funds were cleared. On the 3rd, within hours of moving in, we were up and running with entrance cards, wireless, phones, and access to limitless coffee and comfortable seating areas. The team at Lee & Lee have been superb at helping us to get all the documentation together. We had to collate documents from Morgan Motors Company in Malvern, HSBC in Hong Kong, a company secretarial firm in HK, and our own documentation from Beijing. HSBC in HK were very helpful and responsive to our needs for letter of good standing required by the Chinese authorities; helped by their long standing relationship with Morgan Motors. I thought it worthwhile for the sake of record to list the number of papers required. This is such a lengthy process in China  but one which appears to be all above board, transparent, and structured. For name pre-approval of Administration for Industry and Commerce (AIC) 1. Authorization Letter (signature) For Commerce Bureau ( MOFCOM): 1.     Namelist of Board Member (signature) 2.     Authorization Letter of Service of Legal Files (signature) 3.     Authorization Letter for Administrative Licensing Item (signature) 4.     Application Letter for Administrative Licensing Item (signature) 5.     Appointment Letter (signature) 6.     Feasibility study report (signature) 7.     Articles of Association  (signature) For Administration of Industry and Commerce: 1.     Certification of Incumbency for Board Member, General Manager or Supervisor (signature) 2.     Authorization Letter of Service of Legal Files (signature) 3.     Articles of Association (signature) 4.     BAIC Application Form (signature) For Public Security Bureau: 1.     Application for Chop-making (signature) For Code Bureau: 1.     Advice of Codes Pre-assigned (seal) 2.     Application Form (seal) For Tax Bureau: 1. Business License (seal) 2. Organization Code Certificate (seal) 3. Approval Certificate (seal) 4. Address Proof (seal) 5. Articles of Association (seal) 6. Passport copy of Legal Representative (seal) 7. Registration Form (seal) For Foreign Exchange Bureau: 1.     Foreign exchange registration application form (signature and seal) 2.     Business License (seal) 3.     Approval Certificate (seal) 4.     Articles of Association (seal) 5.     Organization Code Certificate (seal) 6.     Passport copy of Legal Representative (seal) 7.     Passport copy of finally holding person (seal) For Finance Bureau: 1.     Financial registration form (seal) 2.     Approval of Commerce Bureau (seal) 3.     Approval Certificate (seal) 4.     Approval Certificate (seal) 5.     Organization Code Certificate (seal) 6.     Tax Registration Certificate (seal) 7.     Bank Account Opening Certificate (seal) 8.     SAFE card copy (seal) 9.     Business License (seal) For Statistics Bureau: 1. Application Form (seal) 2. Organization Code Certificate (seal) 3. Approval Certificate (seal) 4. Business License (seal) The new address: Morgan Cars Limited (HK) B-16. 10th Floor SOHO Nexus Centre 19 East Third Ring Road Beijing 100022 Office: +8610 5735 1173 Email: drive@morgan-cars.com.cn Web: http://www.morgan-cars.com.cn    

May 24 (Bloomberg) -- Bloomberg's Stephen Engle speaks with Jim James, a Morgan Motor Company roadster owner who's asked the British automaker for permission to market the handbuilt luxury cars in China. Luxury-car sales in China will rise 20 percent this year after surging 48 percent to 459,000 vehicles last year, according to industry researcher JD Power & Associates. (Source: Bloomberg). https://youtu.be/heqoom-KrD0 https://www.youtube.com/embed/heqoom-KrD0