MG-Rover.org’s Steve Childs has kindly given AROnline permission to publish the full text of the wide-ranging interview which he conducted with MG Motor UK Limited’s Sales and Marketing Director, Guy Jones, on the 23rd April, 2010.
How would you describe the sales of the TF LE500, TF 135 and 85th Anniversary models since their launch?
We are currently seeing a significant increase in sales and we are seeing significant renewed interest in the TF. Year to date sales are at least 50 per cent up on this time last year. I think it’s come off the renewed interest in the brand due to the publicity we have off the back of MG6 so, at the moment, that’s good news. I think the TF’s now reached iconic status – it has no real direct competition any more and has its own place in the market. We focused on the 135 price position so it offers superb value for money and, going forward, I foresee demand exceeding supply for this year.
How do see the TF competing with the MX5?
I think that quite a few of the journalists are now saying that the TF doesn’t really compete with the MX5. The MX5 has been developed as a softer vehicle, more of a cruiser. However, what we have done with the TF – especially the 85th Anniversary – is to focus it more as a driver’s car, almost back to basics – a sportscar experience with the right driving and handling balance. With the price position and the good specification of the TF 135 – under £13,800 – it sits at a difference place to the MX5, which is more expensive. The MX-5 is more modern, but less engaging and less ‘pure’. Due to the way Mazda have gone with the MX5, the two cars have different appeals and aren’t in direct competition any more.
During the Phoenix years the MG brand was always a driver’s car. The Rover brand was there to offer a more luxury-biased, softer option and MG was able to focus on the driving experience. How will the new MG brand differ, if at all, and will it have to stretch and cover what would have been offered by the Rover alternatives?
Ah, good question! I think that, when MG Rover existed, the brands had to be artificially separated because they were essentially the same car trying to appeal to two different sets of people. The good thing with the MG brand is that it’s always had amazing appeal across all age ranges and across the sexes. The ZR had one of the broadest owner profiles of any car in that sector.
You can see from the TF, the MG6 and the MG ZERO Concept that they are being true to the brand in terms of their appearance and the way they drive. Take the reviews of the MG6 recently in Autocar and Auto Express – it drives best in class with the ride and handling compromise so we are being true to the brand. Despite some people being upset that the first car being produced isn’t a replacement for the TF, we now need to create a volume brand because Rover no longer exists to give you the volume. MG has to be both sporty and volume.
I think MG’s potential is now unlimited – it was somewhat limited in the past because of Rover and it’s not so much the brand being stretched, it’s more like it can now be unleashed, if you will. MG can have wide appeal and yet cater for the MG fans who want a pure driving experience.
Who do you think of as the nearest competitor to the MG brand?
One of the reasons I was attracted to work at MG was because the brand has such wide appeal. I think people have always tried and (and still do try) to pigeon-hole MG as a competitor for this, or a competitor for that. It’s clearly a sporty brand so people come up with the likes of Mazda and SEAT, or say it could be a potential Alfa Romeo in the future.
However, looking at the market place, I see three clear sectors: the value for money brands – if you like Hyundai, Kia and Skoda, there are the volume brands – the likes of Ford, GM, Nissan, PSA, Renault etc. and then you have the more niche, specialist brands such as Mazda and SEAT. I think the beauty of MG is it will pull customers from all three of those groups – it will offer fantastic value for money, it’ll be sporty, but not extreme sporty, say like Lotus. MG never has been extreme to that degree – it’s always had broader appeal. It will also be a very good alternative to those mainstream vehicles i.e. why shouldn’t someone who goes to buy a Focus have a look at the MG6?
How has the economic downturn affected the plans NAC/SAIC Motor had when they bought the company for the TF and MG itself?
It hasn’t affected the investment plans for the future models, so MG6 still comes at the end of 2010, but what it clearly has affected are the sales of the TF sports car. The TF is a niche product anyway but the two seater sports car market has been dramatically affected, dropping some 40% over two years. We basically lost 40% of the market forecast when the company bought the remains of MG Rover. The TF also tends to be a discretionary purchase – many people buy them not as their every day car but as a second or even a third car and that sort of thing really dries up in a recession.
Clearly loosing that amount of the market place, limiting yourselves to that degree, does [call into] question the confidence in the business. The good thing is that we’ve now turned around TF sales, they’re increasing after a very difficult time and the Future Model Programmes are still progressing.
Overall the impact wasn’t significant on the big scale of things, only for TF really.
Have you thought about a “low spec” version of the TF, along say the lines of the old 115 – albeit still with the 135 engine – you know, less options, different trim etc. and selling it for £9995?
At £9,995 there is no money in the car. We’re only selling 4-500 cars a year, so we need to keep the communication to the public very simple. You need to balance it really – when we launched the LE 500 there was a lot more spec [compared to the 135] but more money, which was the right decision at the time. Then what happened was the recession which ended up meaning that the price of the LE500 needed to be challenged. I think where we are with the 135 is the right balance of specification and price – it’s a lot of car for the money. I don’t think people want a stripped out car, unless you can dramatically reduce the price – we’re not able to do that, so what we have is the right combination.
Do you think in time that Austin could serve the purpose Rover used to?
Yes, an interesting question! Clearly Austin is still a very important part of this company’s history. We respect that, we kept Lord Austin’s office here. The Austin name is part of the business, so who knows! I think if you look at how the automotive market has developed – especially in China – in the last few years, the world has changed, the balance of power has changed. Brands which have been a failure in America, such as Buick, are now a success in China. Who knows what could be achieved? I’d like to think that, yes, there may well be something there, but that’s really all I can say on that one.
You may have seen the article on a TF successor in Auto Express last week. How near the mark was it, or was it basically mostly fiction!?
It was pretty much all made up! The truth is that a new sportscar is part of the Product Plan, but we don’t want to talk about a new sportscar at the moment. That’s mainly because we need to build a new business and sell the car we do have. We have the MG6 coming at the end of the year and we’ve just unveiled the MG ZERO Concept car to show where the brand can go next so there is no need to talk about new sportscars now . I think we know what will happen when we announce a new sportscar programme – the world will go wild about a new MG sportscar, an MGB successor etc. More so than, perhaps, an MG TF successor…
There is a time for that, but it’s not now. Yes, MG sportscars are part of the Product Plan but we have not got anything official to say on the matter now and won’t have for some time. We have MG6 to focus on, along with other things incuding the products which will come along after MG6, but it is part of the brand and we clearly need a sportscar in the line up.
During the MGR days, MIRA worked with MG to produce a Hybrid TF – how far off do you think we are from seeing an all-electric or a hybrid MG?
Well, there’s an all-electric car on the SAIC Motor stand at the Beijing Auto Show today, the E1. They’ve invested heavily into electric and hybrid technology and the first result of that investment is on the stand today. Clearly SAIC Motor is demonstrating the results of that the investment into electric and hybrid powerplants and drivetrains, so you’ll just have to watch the communications from the company and see what happens.
The MG6 is being launched without a diesel derivative – what affect to you think this will have on the launch of the car and when will the diesel derivative launch?
We hope to launch the diesel version 12 months after the petrol. They’re not launching at the same time because we are developing an all-new 1.9 diesel engine – it’s an MG design, being produced within SAIC Motor and it’s not going to be ready in time. In terms of the affect on the launch, we want to establish MG6 in the retail market first of all. We don’t have the capability to go straight into the major fleet and volumes that we want to with the product and the brand.
I think the petrol version will allow us to focus on the retail market, but we’ll clearly be able to increase sales when the diesel version comes online. We need to plan the diesel entry into the lease and fleet sectors in the next 12 months to be effective so we need that time to bring the car to market anyway. It will significantly change the volume, but we need to build up the process and the Dealer Network here to cope with the volume growth.
Is the G-Series diesel, which was developed by Powertrain in the run up to April 2005, completely dead?
I can’t comment on that. All I can say is that we will have a family of diesel engines going forward, developed by ourselves. Whether any learning was taken out of the G-Series, I really can’t say. I don’t know – it’s something I’d need to look into, to be honest.
I understand that with the TF you have a reasonably free hand to source components for the car so, whilst the main components come in from China, you could, say, source new bumpers, dash, trim, seats etc. and build a different car here than in China. Is this the case with the MG6?
Given that we source globally and the group is based in China and a lot of the component manufacturers are also in China, a lot of the stuff comes from there. In respect of whether we’re constrained by the features and design of the car – no, I think when you see the MG6 (we’ve still got some surprises up our sleeves for the launch of MG6 – people haven’t seen everything yet) you can tell it’s been very much benchmarked on the leading European players and the quality is obvious when you sit in it.
People say it’s a Chinese car tuned for European tastes, when in fact it was a European design, designed right here in the UK, by the team here in Birmingham and designed for Europe – China in fact got a European car and adapted it for China, not the other way around. You wouldn’t have got comments like “best in class for ride and handling” if it was a car designed for China and then tuned for Europe.
The Monogram Programme, which MG Rover used to have, allowed customers to customise their cars with special paint and trim options. Do you think you will offer something similar?
Not initially, it’s something for the future. We want to get back to producing cars and provide a good range of choice that covers most of the market. Things like this can come later.
How much of the MG6 is EU/UK sourced?
I don’t know to be honest. The key thing is that the car is designed and engineered in the UK. The second thing is that people have talked about the MG6 being a reskinned Rover 75, but it’s not – only the front subframe was carried over. Everything bolted to it is new and the car is shorter and wider than the 75. It’s the British team that have delivered the ride and handling and it’s a credit to them.
In the past, the British message we were pushing was the supply base – all the bits come from round here. Yes it would be great to get some of that supply base back and I think that, as manufacturing builds here, there is the opportunity logically not to ship components half way around the world, but the initial British focus for me is on the British design and engineering of the car.
Some TF160 owners have said that they wouldn’t buy a new TF because they don’t want to step down in power. Are there plans to bring out a higher power TF?
No. There is a possibility of doing something as an aftermarket conversion. We do have a 160 upgrade kit that we are currently evaluating but we haven’t decided anything yet. It would be interesting to hear from your members who own one of our TFs if they would be interested and how much they’d be prepared to pay.
Would the engine warranty be affected by fitting this kit?
No, the warranty would be intact and valid.
The VVC system was widely recognised as one of the most flexible Variable Timing systems around. Can you explain why the system has been dropped and replaced with a VVT style system in Chinese models and are we ever likely to see this engine in a UK model?
In terms of the current cars we went for simplicity, the engine with the broadest appeal. When building such limited numbers, we can’t afford to have lots of different engines. It would be nice to have a more powerful, more expensive engine but it would have an affect on the price of the car. The benefit you get for the additional cost wasn’t deemed worthwhile over the 135 engine. Anyway, a higher output engine wouldn’t be for all of our customers – it would only be for a small number of customers and, when you’re only doing a small number of cars, the costs of having two engines in the line up just aren’t viable.
We think the 135 gives you the perfect balance of performance and economy. Actually, it still amazes me just how economical that engine can be when used every day on long journeys.
About the VVC, I can’t answer why it was dropped I’m afraid. I don’t know off hand.
Can you confirm which markets Longbridge is currently and will be producing cars for?
Other than the UK TF, we start next year with RHD and the plan is to supply any RHD markets where it’s as easy or easier to supply the market from the UK than it is from China. In terms of Europe, it depends on volumes of each market.
Do you have plans to go back to the Australian market?
Yes we do. I can’t say when at the moment, but we do plan to go back into the Australian market with MG6 and we’re in the planning phase on that.
When will the MG6 will be on sale in the rest of Europe, most importantly, the Netherlands?
That will be when the diesel is available, so it’ll be 12 months after 2010 UK launch and when we have Dealers setup in that particular market.
Will the MG6 saloon introduced soon?
It will be introduced in 2011 – it’ll follow the fastback within the year.
Will we see an MG version of the Roewe 350?
I can’t confirm that at the moment. However, what it would be is an MG model based upon the Roewe 350 platform, just as the MG6 is based upon the Roewe 550’s.
Do you know if there are any plans for the production of commercial vehicles at Longbridge using the LDV brand as this is now owned by SAIC?
No, I’m not aware of any plans at the moment.
Do you think that the MG badge could extend to a 7 seater i.e. an MPV?
I don’t think so in the near future. I think that, if anything, SUVs are more likely as MG products than MPVs. I’d never say never but, at the moment, with a sporty brand such as MG, an MPV doesn’t really fit – it would be more of a Roewe product in China.
Has SAIC Motor any plans to sell Roewe (in addition to MG) versions of the company’s self-developed models outside China at some point in the future and, if so, has any consideration been given to using the Sterling badge on such models?
The plan is that Roewe is the Chinese brand and MG is the international brand.
Are estate versions of the MG6 or any of the other new cars planned?
That depends on the growth of the MG6. Other competitor models have estate versions, but we would need the volume to grow to the level that would warrant and be financially viable to produce one. It could happen – an estate version of the car would clearly work – other sporting brands like Alfa Romeo and Audi have estate versions so it’s something that definitely can happen should there be the volume and demand. We’d need to measure the demand following the launch of the fastback and saloon.
MGR had plans for AWD on a MG ZTT… Would an AWD MG6 be contemplated – has anything been included in the floorpan etc?
I’m not aware of any plans for AWD at this stage.
Nissan has had particular success in the new ‘Crossover’ segment with the Qashqai. Is this a segment that MG would like to be in and, if so, when?
I think that the sort of cars that look and feel like an SUV but have much better fuel consumption are a general industry trend so, given what I’ve said about MG and SUVs, yes that is a type of product that fits with MG.
Hyundai has enough confidence in their product to offer five year warranties on its cars – will MG have this level of confidence in its cars?
Yes, that demonstrates the confidence which Hyundai and Kia have in their products but it’s primarily done because those value brands need to promote that confidence. We don’t want to be in the position where we have to do something like that because the brand is worthless. What we want to do is make the car stand in its own right and have a competitive warranty compared to the market average, which is currently three years. If everyone moved to five years, then the competitive position would be five years. These new cars are sporty and dynamic – they proudly wear the MG badge. We don’t want the launch platform to be “buy this car because it’s got a seven year warranty”. It’s a decision that we don’t want warranty to be the key message. Our position will be competitive and we’ll review that depending on what the market does.
The service packages used by MINI have been a great success and encourage owners to take their cars back to the Franchised Dealers for servicing – are MG contemplating this type of service package?
Yes, they work well for MINI and they’re a good idea.
Why is there such a long gap between Chinese and European cars going on sale? A year seems really slow!
They are significantly different vehicles! We want to make MG successful in Europe and to get a car to handle and ride like the MG6 that was tested by Autocar isn’t a five minute job. The car was designed for Europe, i.e. the platform, crash structure and styling etc. but the European version differs so significantly from the Chinese model that it takes a good chunk of time.
We may start to parallel process programmes for China and for Europe in the future and get the launches closer together, but SAIC Motor only has so much resource at the moment. A lot of the guys developed the car for China and then the same resource developed it for Europe. It does seem slow and frustrating to outside observers, but you have to understand the amount of work going into it – we want to make MG a success in Europe and we’ll change whatever we need on the car to do that.
It does serve to demonstrate that Longbridge is not simply a factory that assembles kits shipped in from China – the Chinese and European spec cars can be completely different.
We also had to do the Euro V engine work for the Europe market as China aren’t up to Euro V yet and that again takes time.
Are there any plans to develop and introduce larger and more powerful engines in addition to the N-Series?
Going forward, we would want sporting derivatives, but the focus at the moment is on smaller, more efficient engines i.e. still keeping the sporty character and drivability, whilst being as efficient and economical as possible.
What’s been done to the N-Series to address the perceived head gasket issues with the K-Series?
It’s a whole new structure. The engine was completely re-engineered when the old company’s assets were bought. There were two problems with the product itself: the head gasket and the way it was bolted through the block. We’ve got a completely new multi-layer steel gasket that seals properly and a new bolt system through the block. Really the top engine is a complete re-design and those two modifications solved the head gasket problem.
Another problem was the lack of a water level sensor which meant that, if the system ever did run dry, you never actually knew until the head gasket went. Often, when the head gasket went, it was because you’d run out of water and the head gasket was designed to blow to protect the engine. We also have a re-designed water system, which is much better than the one in the old cars and that, when combined with the low coolant sensor, the stronger head gasket and revised top end of the engine, means that we are absolutely confident that the head gasket issues have been engineered out.
We also have not had a single mechanical failure of that engine since it was re-designed
AROnline’s Editor and News Editor hope to arrange some interviews of their own at MG Birmingham next month and, whilst Steve Childs’ questions were pretty comprehensive, we reckon that our readers will have many others for us to put to Guy Jones and his colleagues. Please, therefore, post any such questions in the Comments section below – we will do our best to include as many as possible in any interviews.