Blog : MG – which direction for the future?

Carole Nash Classic Insurance Specialists

AROnline Contributor and former BMC manufacturing apprentice turned British Leyland retailer Richard Williams takes a closer look at the famous British-born MG marque’s prospects following the debut of the MG E-motion Concept at Auto Shanghai in April and the UK unveiling of the new XS B-segment SUV at last month’s London Motor Show.

Regular readers might recall that, in my two previous articles, Blog: MG – more jam tomorrow… and Blog: Why the history books are waiting for MG, I was not only critical of SAIC Motor’s stewardship of the MG brand but also concluded with this pessimistic comment: ‘Sadly, my view is that, given the current products and SAIC Motor’s track record with MG to date, there can be only one outcome when the financial boys in the back room say enough is enough.

‘MG therefore seems destined to join the likes of other storied British marques such as Austin, Hillman, Jensen, Morris, Riley, Rover, Singer, Sunbeam, Triumph, Vanden Plas and Wolseley – a list which may soon even include Vauxhall – in the history books.’

MG’s new introduction

However, since the latter article was published back in April, SAIC Motor has exhibited the MG E-motion Concept at Auto Shanghai and MG Motor UK has unveiled the Ford EcoSport and Nissan Juke-rivalling MG XS SUV at last month’s London Motor Show – I therefore wanted to review my rather pessimistic conclusion about MG’s future in the light of those two announcements and the news that there are plans for a UK line-up of six models.

Firstly, though, a brief recap: as was said in the last article, MG’s current situation in the UK does not bode well for a profitable future for its UK distribution arm and its loyal, still largely owner-driven retailers. The brand has a competitive product in the low-cost end of the market, but its market message is confusing.

MG has traditionally been an innovative sporting brand, a unique niche product emerging from the bland mass market cars made by Morris. It developed a loyal market of free-thinking individuals who wanted a car that was a little different, that bit more exciting and individual than the mainstream volume market.

Brand values

It was the strength of its brand alone that helped it to endure long after Austin, Morris and all the other BMC>MGR legacy brands ceased to exist. It still has a huge brand loyalty worldwide in America, Canada, Europe and the former Commonwealth countries – in short, a huge potential market.

So how will SAIC Motor capitalise on the incredible opportunity it has for this brand? Does it go innovative and upmarket following the vision of Cecil Kimber, who founded MG with Lord Nuffield’s backing and support, or does it go mainstream market with mass-produced, lower-end, value-for-money products competing with the Renaults and Suzukis built in low cost production facilities in Eastern European countries?

Let’s look at the options…

The cheap and cheerful mass market

Now that MGs are completely manufactured in China or Thailand it means that any vehicles destined for the UK market are basically the same as the ones for those markets. It would not make economic sense to produce three to four thousand vehicles uniquely manufactured for the UK market.

These vehicles, while competent, are in a fierce market place which is driven by cut pricing and cheap consumer finance offers along with plentiful pre-registrations. Once well established in this market place, it would be extremely hard – indeed, nigh on impossible – to move the brand more up market and place it in a more profitable niche.

Back in the 1980s, David Brown, a used car retailer, who really understood the UK car market, managed to sell a significant number of Protons using extended warranties and excellent consumer offers from a standing start.

What happened before

The quality of the vehicles was excellent and a very loyal customer base grew quickly. However, when the operation was taken over by the manufacturer, despite every effort, it proved impossible to move the brand profitably up market and so it withered on the vine – volumes fell and the brand withdrew from the UK market.

SAIC Motor’s marketing of its current products as MGs sends a confusing message to the prospective customers. Older customers ask themselves whether they are really MGs, whilst the younger prospective customers wonder what the current MGs stand for: excellent value for money or innovative excitement?

To give credit to MG Motor UK’s Head of Sales and Marketing, Matthew Cheyne, and his team at Longbridge, they are working hard to build a loyal retail network and slowly increase volumes with a modest marketing budget and very niche, low-end products – although, even in the current post-Dieselgate climate, the absence of a good diesel engine surely holds back a large potential of retail sales in the rural markets.

The prestige sports car and sports saloon market

This is what the MG marque is known for around the world: individuality, leading-edge innovation and, above all, fun.

A production version of the MG E-motion Concept is just the model that could propel MG back into worldwide recognition – especially, if accompanied by a range of funky electric SUVs of the type which have taken over from the two-door sports car market. With SAIC Motor’s enormous resources, it is not inconceivable that the company could launch these exciting models in the near future and put MG right back on the worldwide automobile map.

However, while an AROnline Editorial Team member who examined a Chinese-specification MG ZS during last month’s SMMT Test Day at Millbrook Proving Ground, tells me that the new model should be a competent and competitive B-segment SUV contender, initial indications are that the MG XS will be priced between the MG 3 and MG GS when it reaches UK showrooms later this year and therein lies a potentially significant problem – those three models and any production models based on the E-motion Concept’s new electric modular architecture would be poles apart, have totally different customer bases and would, above all, confuse the customers as to what the MG marque represents.

So what should happen now?

Well, here’s my take…

SAIC Motor needs to adopt a different retail model for the production version of the E-motion Concept and the other models based on its new platform – if the company acts quickly, it could move into the space being established by Tesla and, to a lesser extent, Lexus before the mainstream OEMs pile into the market – the name MG would fit perfectly.

Change the name of the current models to SAIC – after all, that is what they are and most people purchasing them, as well as the press, know who makes them. Don’t pass them off as MGs.

The team at Longbridge could then get some aggressive ‘deal-based’ marketing rolling on the ‘great value for money’ basis. They have the current network in place and, as sales grow, then this network would grow organically providing nationwide coverage and the potential to further increase sales. There will always be a retail opportunity in the car market for local retailers who are trusted by customers so there would be no reason to change this.

So where does this leave MG?

The E-motion Concept is already here and the high-performance SUVs sharing its electric modular architecture are, no doubt, well advanced. These products will do well in a direct sales environment similar to the model which Tesla has already adopted. With increasing legislation in the world’s polluted cities, what is merely a trickle of EVs will soon turn into a tidal wave and SAIC Motor/MG, with its existing brand name, could be at the forefront of that – but the company has no time to lose.

Geely Holding Group’s new start-up Lynk & Co brand has, as mentioned in my previous article, already begun manoeuvring carefully and gradually into the position MG should be taking. The fact that Geely Holding Group has just announced its acquisition of a controlling 51 per cent stake in Group Lotus plc should send nervous messages to Shanghai.

It would be fantastic to see a true resurgence of MG as the innovative motor car for individual drivers – the potential is there. It would be wonderful to see the MG teams in the UK and Shanghai grab the opportunity, but perhaps the other equally iconic British-born and now Chinese-controlled marque with similar brand values to MG’s will take the lead.

Am I any less pessimistic about MG’s future? Well, yes – but only time will tell whether that turns to cautious optimism

[Editor’s Note: Richard Williams is still a Director of the company founded by his grandfather 106 years ago, Williams Automobiles Limited, and represented the smaller retailers on the National Franchised Dealers Association’s National Executive for many years. The company, which was highly commended in the Best Dealership category of the 2014 Automotive Management Awards, currently has franchises for three of the UK’s leading low-volume sports car manufacturers, Caterham, Lotus and Morgan.]

38 Comments

  1. The E-motion certainly came from nowhere and a lot of competitors should be seriously worried about it even though a £30k price tag looks more than a little optimistic. It also showed that SAIC has got its mojo back on interior design – also seen on the Roewes which are the other half of SAIC MG and often overlooked – they have some nice models.

    MG is launching in Western Europe in 2019 so they don’t seem to have given up on this part of the World despite some avoidable false starts. They have had a similar situation in Australasia. The second factory in Thailand and the new plant in India also bodes well.

    Lynk & Co might be successful but I am reminded of Qoros which seems to have faded away despite all the Western input.

  2. Firstly, one of the most important decisions that MG need to make is design, develop and manufacture an exciting cutting-edge roadster with quality to match. This alone would reintroduce MG back to the sporting soft top world and bring immense excitement and good will from loyal MG enthusiasts alone. It would also bring on board, if the price was competitive, a younger buyer, which is badly needed to raise the brand profile and sporting characteristics if the brand has a future in UK plc.

    Beefing up the MG3 with fantastic handling and a performance engine plus a tweeking of the body would be the next step, and the same with the GS. However, if MG is to have a long-term future, the most important item on the agenda would be to improve the quality of the interiors. Export them to the United States where 50,000 MGs still exist on the road from the MGB/Midget era and the sales would go through the roof. The brand has so much loyalty and the opportunity is there on a plate to be successful if handled correctly. Life’s too short not to.

  3. Our local Mitsubishi dealer has started selling MGs and has the MG flags on their forecourt. A GS and 3 have also been on display at the indoor shopping centre at Sunderland. This must explain why I am now seeing a few more MG3s on the road. Perhaps things will pick up for the marque, but I don’t see them becoming as popular as the Hyundai, KIA etc.

    I too fear that the Vauxhall brand could be removed in the future and replaced with Opel across the range, since the PSA takeover, but it may not happen for a few years – hopefully.

    • To drop the Vauxhall name would be a crazy thing to do as it is the Opel part of the GM Europe that’s losing money, not Vauxhall. The Ellesmere Port and Luton plants are profitable.

      • Umm, no, Vauxhall are losing money hand over fist, and from my last visit to Luton, i was told without any shadow of doubt that once the two UK plants have completed their contracts, they WILL be closed in favour of the German plants.

        The Police unit at Luton will be moved to a stand alone unit elsewhere, and the Vivaro will disappear to become a Peugeot derived unit, which then means at least four brands off of one model.

        They are already cost cutting at Luton to save money, staff are not being replaced as they leave, and all future expenditure is having to be re jigged.

        And this has come from Staff at Luton

      • The Vauxhall name is literally just a UK badge though, if you see an Insignia where the front badge has fallen off, the outline of the badge placement on the grille is Opel “lightning bolt” shaped.
        The only distinct models recently were RHD imported Holdens.

        Ellesmere Port and Luton can remain open, whether producing cars and components for Vauxhall, Opel, Citroen, Peugeot, DS, Talbot 🙂 etc.

        • Sadly from next year Holdens will themselves be rebadged Opels. Australian production and unique Holden models are about to be consigned to the dustbin of history.

  4. It really doesn’t matter any more, MG is an irrelevance. Anyone who remembers the days when they produced competitive products is probably a potential guest at the Bayview retirement home, and the next generation remembers the joy of Allegro and M cars – then the slow suicide of MGR (probably a week after they took delivery) and any average teenager today probably thinks an MG is a new tablet from Meizu…

    Add to that the painful “Aren’t we British” ads that are more like Central Committee propaganda than anything else and the CityRover (imagine that said in a heavy Chinese accent..) and the situation has clearly gone from worse to irreparable…

    Nuke the remains from orbit, it’s the only way to be sure.

    • Not quite geriatrics, Jemma, most people my age( late 40s) can remember MGBs and the uproar when the brand was axed in 1980. Also the MG versions of the M cars were popular with some of my friends in the late eighties when they could save up to afford something better than a Fiesta 1.1. Then came the Z cars in the early noughties that developed a considerable young following and probably staved off the death of MG Rover by a few years.
      I will admit MG now is just a brand for Chinese cars, but I do notice the Chinese seem to be quite good at reviving old British brands: their latest one is Baird televisions, that most people will remember as the Radio Rentals brand, but is now a budget brand for Bright House.

    • I agree Jemma. While I used to very proudly drive a 2.0 EFi MG Maestro on the mid-late 1980’s, the brand has become an irrelevant has-been, certainly since 2005; the sooner we can all move on, to something that’s relevant, the better.

  5. Hyundai and Kia have shown how importers can move upmarket.

    New topic: a sports car would be selling into a small market, but would revive the brand image. I saw a 1972 MGBGT this morning: by no means mint, but 45 years old. Can you see anyone driving to work in a 2017 MG3 or GS in 45 years’ time?

    In this industry, you’re only as good as the last product you launched. There has to be something inspiring and memorable about your car if you want people to buy it deliberately, rather than accidentally.

    • It that really a fair comparison? An MGB would almost always be cherished.

      An Allegro would be a better like for like, a minor classic now but for years a lot were unceremoniously scrapped when they were uneconomic to repair.

      • I see your Allegro and I raise you – twice recently I have seen Morris Marinas on the M1. Morris Minors are, of course, relatively common on our roads. MG3s aren’t.

  6. I’ve seen what I believe to be the prototype XS out testing quite a bit (covered in black & white check) and it looks pretty underwhelming. Add in the suggestion that it will have the same 1.5 petrol engine as the 3 and you have a package that is about as attractive as the Tory manifesto.

    If the XS is LAUNCHED as a PHEV it might have a chance – if SAIC has the technology it seems madness not to do this. If not it will be an overpriced, less sophisticated rival to the SsangYong Tivoli.

    The market MG needs to be in is batting against Dacia – if SAIC had an engine equivalent to the 0.9 TCe Dacia use in the Sandero, they might be able to compete.

  7. Proton were excellent cars – as the Japanese manufacturers started to charge more for their cars and buyers of budget cars wanted something better than a Lada Samara, they found their niche, making Mitsubishi-based cars at budget prices.

    The Mitsubishi link meant they had a very reliable car to sell and being made in Malaysia meant the prices oculd be kept low. No wonder for a decade the MPI and Persona became popular with taxi drivers and private buyers alike, you had something that was reliable, well equipped and cheap to buy.

    I had an MPI that, while not very thrilling to drive, developed absolutely no faults in 2 years of ownership and I’d still rate as the most reliable car I’ve ever owned.

  8. Geely is busy at the moment: it intends to use Polestar as a brand for electric sports cars. See this Auto Express article:

    Volvo’s Polestar brand to build its own electric sports cars, Steve Fowler, Auto Express, 12 June, 2017

    That may well scupper the MG E-motion’s chances before they launch it. As an unknown brand, it will be interesting to see how Polestar will fare.

    The article states that they intend to use Volvo’s platforms but, as Geely has just acquired an interest in Lotus (and Proton), perhaps that will lead to a successor to the Tesla Roadster. The Auto Express article suggests that Geely wants to create a range of brands to rival the VW Group – they certainly seem busy doing just that.

    • On this note, I have some confidence in Geely establishing new brands and developing existing ones. They fouled up once already with their Chinese brands (Emgrand, Gleagle, Englon), which was a case study on how not to create new brands. Geely are fast learners if nothing else. They knew they were on to a bad thing and killed the multi-brand strategy as soon as they could, bringing the cars back under one marque (it could have been so much worse—e.g. letting Riley and Wolseley languish). Managing Volvo and creating Lynk & Co. suggest they’re trying to be more credible this time round, rather than pull a fast one over Chinese consumers’ eyes. Let’s also not forget the London Taxi Co. With Lotus and Proton as well, they might well succeed, and Polestar could be the perfect icing on the cake.

      • I think, with respect, that there may be a caveat to Jack’s analysis – I am still attempting to understand the relationship between Geely Holding Group’s acquisition of a 51 per cent stake in Group Lotus and the almost simultaneous announcement that Polestar will become a standalone brand.

        Why? Well, on the albeit limited information currently available, Lotus and Polestar may well be pitched at pretty much the same space in the marketplace. Geely Holding Group intends to complete the acquisition of both Group Lotus and Proton Holdings by the end of Q3 so perhaps more will emerge about the company’s plans for Lotus at that point.

        Hopefully, though, someone better placed than me will be in a position to ask the relevant question…

  9. Sad that Proton seemed to lose their way when they ended their link with Mitsubishi and tried to produce their own designs. The Personas and MPis might have been a little dated, but they were reliable and went well, while the designs Proton launched on their own in the mid noughties like the Satria and Gen 2 were too crude for a market that had moved on and Proton died out.

  10. If there had been an ounce of loyalty towards the MG brand in the years leading up to its demise in 2005, British MGs would have continued to roll off the production lines and people would have continued to buy them. This has clearly not been the case and, in my opinion, brand loyalty towards MG can only continue its slippery slide now that the once British badge is a mere marketing gimmick used to decorate sub-standard Chinese tin boxes. The current day MG badge may have kudos in China, but in Europe it’s a total irrelevance. In fact, I’m beginning to wonder why it’s discussed so much on this site and why I’m bothering to join in a discussion on the subject…

    • It is discussed on here because it is a site for people who have an interest in all car brands past and present. You have clearly not even sat behind the wheel of the current models that wear the once famous octagon badge. They (the MG3 and MG GS) represent good value for money and seem far from what you describe as sub-standard Chinese tin boxes. Each to their own I guess…

      • Fair enough, I accept the comments on why people like to discuss a variety of makes (including oddities like Chinese MG) on here. However, I HAVE sat in both the 3 and the GS – and DRIVEN the 3 – and I stand by my comments that they are sub standard – i.e. not as well built, finished or as good to drive as the competition. Add to that, even though they are cheap, any financial advantage of a keen purchase price is quickly thrown away with horrific depreciation. I’m not usually this negative but, let’s face it, if they were any good, more people would be buying them…

  11. The MG3 is well built, brilliant to drive on twisty roads and nicely finished for the price. My interior light has blown, the only fault in two and a half years ownership. It could do with a little more zest and 37mpg isn’t as good as others perhaps, but it has bags of room front and rear plus sharp styling. They are slowly becoming more commonplace, but the rarity is part of the attraction, marking drivers out as individuals. It definitely has Rover DNA in it, too. I’m still pleased with mine.

    • 37mpg would not be outstanding in an MG6 – sized car these days. My diesel Polo does 68mpg on my motorway commute – the Mondeo diesel will only do about 50. I’ve given up on petrol engines – too thirsty, too unreliable, not always very durable.

      • The MG3 is aimed at people who would buy a Suzuki Swift, they’re not overly concerned about huge performance, but who want a car that looks good, is fun to drive and isn’t as expensive as a Mini. In these respects, the MG 3 ticks the boxes, but unlike the Swift, the dealer network is too patchy and the economy is far worse. I reckon had the MG3 been more economical and there were more dealers, it could have done very well.

        • The MG3 is doing quite well locally to me, as MG has franchises with some family owned ex-Rover dealers.

          Though the clientele, from the drivers I’ve seen, does seem more Metro than MINI.

          A smart looking small car, with hints of Fabia and Swift about it.

  12. I’m always interested in people who regard Chinese products as inferior. Possibly some of the obscure budget branded products you get in Wilkos might be cheap tat, but products made for Western companies are usually good and competitively priced. My Compaq laptop, which is made in China under licence for the Americans, has never developed one fault in its very long life, but a German-made Siemens desktop needed to be fixed the day after I bought it and required three visits to a computer shop for repairs before dying completely at six years old. Also a Bush-branded DAB radio, in a very attractive wood and chrome retro case, gives excellent service and that’s made in China.

  13. I find Dyson vacuum cleaners more interesting than MG Motor cars, which isn’t very interesting at all, but at least they are market leaders, innovators, and British owned.

  14. Looking forward to spending time with the XS, the 1.5 manual and 1.0 litre auto are perfectly suited, and apparently the 1.0 auto behaves like a car with a far bigger engine, interior trim and plastics are a huge step forward.

    The E-Motion will not be made, instead a modern MGB will, in conjunction with another brand, more info to come on that, the MG6 might not be coming to the UK after the sales disaster from Mark 1 & 2, but the next gen GT may well appear.

  15. As a small volume high-tech petrol-electric hybrid sportscar maker (and a XS hybrid), MG could carve out a nice little niche in the UK. I always hoped new MG would be like a BMW ‘i’ range for the common man. That would mean Leaving the MG3 and the like to be cheap rental cars in southern European markets where they naturally belong. Surely by this stage the competent, but utterly conventional and slow selling MG3 must be doing more harm than good to how people perceive the brand in the UK.

    • As I’ve pointed out, the car the 3 is aimed at, the Suzuki Swift, has had a facelift and has moved even further from the 3, which is still saddled with its thirsty 1.5 litre engine. For £ 11,000, or less if the Swift is pre registered, you can get a 111 mph supermini with near BINI like handling, over 50 mpg and plenty of basic kit.
      I reckon, though, as has been mentioned on here, MG could really make a niche for itself as a budget producer of hybrid cars. A hybrid 3 that is promoted aggressively could make MG a serious player.

  16. I’ve been in a new Suzuki Swift, which the MG 3 seems to be aimed at, and it seems to have moved on again in the same way the previous versions were light years ahead of the original budget car. The new model, even in 1.2 basic SZ3 form, is capable of 111 mph and the 1.0 Boosterjet can reach 120 mph and average 65 mpg. Also the tiny boot space that dogged the previous Swift has been expanded by 55 litres and is at the class average, and the cheap looking interior looks much better on the new Swift. I think the MG 3 will have its work cut out against the new Swift.

  17. I agree that SAIC should promote their own cars – why not the Roewe RX5 which looks much better than the MG GS. Also the internet connected variant of the RX5 would have a USP for UK/European markets, unlike the MG GS.

    Speaking of the MG GS – I would have been very interested if they had brought over the 2 litre turbo petrol, 4 wheel drive variant – an opportunity missed, especially with the recent VED changes.

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