Roewe’s biggest seller is the recently-launched 360, unavailable in Western Europe
Richard Williams makes a number of very valid points about SAIC Motor’s current UK operations in his excellent and well-considered article, Blog: MG – more jam tomorrow…, and has certainly prompted an interesting debate among AROnline’s readers. However, Richard’s conclusion that, ‘sadly, based on the evidence to date, I really do not think that MG has a chance in the UK,’ will have an even louder resonance with at least some other seasoned observers of the UK-based Automotive Industry when set in the context of a story in the August, 2016 issue of Automotive News Europe’s E-Magazine, which was written by UK Correspondent Nick Gibbs and headlined MG’s planned mainland Europe sales start in doubt after UK’s vote to quit EU.
Gibbs observed that ‘MG Motor has struggled for years to convince UK buyers to take a chance on the Chinese-owned brand. Now it has a new problem: Britain’s exit from Europe. Brexit could hit MG’s already long-delayed plan to expand sales into mainland Europe, which was scheduled for 2018 – until Britain voted to leave the EU in June,’ and then added this quote from MG Motor UK’s current Head of Sales and Marketing, Matthew Cheyne: ‘The Brexit vote has thrown all immediate plans into doubt until a new trade agreement with Europe is negotiated.’
Guy Jones, Cheyne’s immediate predecessor, always publically maintained that SAIC Motor would not re-launch MG in Europe until the company was able to offer both potential consumers and prospective retailers a full range of competitive models. AROnline understands that such a range of models would have been in place by 2018. MG Motor UK has, of course, just launched the GS C-segment crossover in the UK while our colleagues at Autocar and Auto Express have recently reported that a smaller B-segment crossover will be previewed in near-production-ready form at the London Motor Show in 2017 before hitting the showrooms later that year. The SSA (SAIC Scalable Architecture?) upon which both the GS and the Nissan Juke-rivalling B-segment crossover are based should also underpin a larger crossover/SUV to compete with the Hyundai Santa Fe, Kia Sorento and Nissan X-Trail as well as the forthcoming Renault Koleos and Skoda Kodiaq.
However, AROnline’s own research suggests that, in addition to those three crossovers/SUVs, MG Motor UK’s original plan was to launch a thoroughly-facelifted version of the primarily Chinese-market MG5, which will feature the turbocharged 1.5-litre SGE engine and six-speed transmission from the new GS, here in late 2016/early 2017. That information, which has come from several independent sources, would seem to gain some credibility when one remembers that MG Motor UK and Triple Eight Racing’s current contract for the British Touring Car Championship covers both 2017 and 2018 – the MG5 will presumably be lighter than the now discontinued MG6 and an NGTC version of the former, with all the latest RML-developed kit and the new TOCA engine, should be a more competitive proposition. Meanwhile, based on the fact that the UK-market MG6 had a five-year lifecycle, commercial logic would suggest that either an all-new or, at least, heavily-revised MG3 B-segment supermini will be launched either before or during 2018.
Some of the four new models mentioned above may, of course, be too far down the development and engineering path to justify calling a halt to any plans for UK launches, but what of Europe? Matthew Cheyne’s emphasis on the importance of negotiating a new Free Trade Agreement (FTA) with the European Union (EU) must be a concern – especially if anyone has noted the unequivocal assertion from EU Trade Commissioner, Cecilia Malmstrom, that “first you [the UK] exit then you negotiate” and been following ITV Political Editor Robert Peston’s recent Facebook posts…
Peston states that, if any new UK-EU FTA was based on World Trade Organisation terms, then all cars and their components would be subject to a 10.0 per cent tariff (Peston rounds the actual figure up from 9.8 per cent). However, the European Automobile Manufacturers’ Association (ACEA) has very clear guidelines for FTAs and many EU-based OEMs have been calling for the maintenance of tariff-free trade between the UK and the EU since the day after the EU Referendum vote.
FTAs are, of their very nature complex and, therefore, time-consuming documents to negotiate – unfortunately, even though Chinese corporate philosophy favours a long-term approach to both relationships and business development, time may no longer be on MG Motor UK’s side. The Art. 50 TEU negotiations can take up to two years (or longer if the other 27 Member States agree) so any post-Brexit FTA deal between the UK and the EU may not be concluded for, at least, several more years after that – in short, using the Canada-EU FTA (CETA) as a worst-case scenario, a new UK-EU FTA might not be completed and, if necessary, ratified by the remaining Member States until, say, 2024 or 2025 at the earliest.
However, the uncertainty about when and, if so, on what terms a UK-EU FTA might be concluded may not be the only factor with a potentially negative influence on MG Motor UK’s future – new Prime Minister Theresa May’s unexpected decision to press the pause button just hours before the scheduled official announcement of the Hinkley Point C Nuclear Power Station deal prompted this comment from the Chinese Ambassador to the UK, Liu Xiaoming: ‘If Britain’s openness is a condition for bilateral co-operation, then mutual trust is the very foundation on which this is built. Right now, the China-UK relationship is at a crucial historical juncture. Mutual trust should be treasured even more. I hope the UK will keep its door open to China and that the British Government will continue to support Hinkley Point – and come to a decision as soon as possible so that the project can proceed smoothly.’
How might a Theresa May-led Government’s decision to withdraw from the Hinkley Point C deal be perceived by the Chinese Government and how might that impact on SAIC Motor’s plans for the UK and Europe? Remember also that, although SAIC Motor is listed on the Shanghai Stock Exchange, the parent company, SAIC Group, is owned by the Shanghai Municipal Government and so effectively state-controlled…
Meanwhile, Hyundai Motor Group’s (HMG) plans to reposition the Kia brand as a more performance-orientated one in Europe are yet another factor which may make the task of re-launching the MG marque there still more difficult. Auto Express Chief Columnist, Mike Rutherford, recently interviewed HMG’s Head of Vehicle Test and High Performance Development, Albert Biermann. Biermann, who was previously Vice-President Engineering at BMW M Automobiles, told Rutherford that Kia’s current product range was founded on three pillars: good value, great warranties and ever-improving vehicle designs.
Biermann then added: “‘Our next pillar – and we see it as a strong one – will be driving performance to match the appearance of our cars.” That very clear statement of intent should resonate loudly with everyone involved in the sales and marketing of MG both here in the UK and in China – in short, for many potential consumers, Kia’s four pillars pretty much define the space in the market which MG should rightfully be occupying.
That said, some positive news has emerged from Longbridge in the last few weeks – a fifth engine test facility, costing £1.2 million, has recently been installed at the site – vehicle emission testing on a rolling road was previously out-sourced, but now SAIC Motor UK Technical Centre’s (SMTC UK) Engineers can carry out the required tests in the correct temperature controlled environment with full emission measurement capability on an in-house basis. Moreover, SMTC UK has also embarked on a Recruitment Campaign and a total of 20 vacancies are currently listed on the company’s website.
Roewe 950 has taken over where the old Rover 75-based 750 left off – it’s not flying out of the showrooms
Mind you, on the other hand, a snapshot of SAIC Motor’s MG and Roewe sales data for China from July, 2016 might suggest to some that the two brands still face a tough task if they are to achieve any significant and sustainable increases in market share there. Here are the figures:
MG/Roewe Sales in China: July, 2016*
- Roewe 360 5867
- Roewe 350 3005
- Roewe E550 2065
- Roewe 550 606
- Roewe RX5 1620
- Roewe W5 337
- Roewe E50 12
- Roewe 950 100
- Roewe E950 810
- Roewe Total: 14,422 (+133%, 6194)
- MG GS 3907
- MG3 1178
- MG GT 505
- MG6 5
- MG5 1
- MG Total: 5596 (-5% 5892)
- Combined Total: 20,018
Indeed, perhaps some indication of the scale of that task might be provided by this anecdotal evidence – whilst he was visiting the UK last weekend, a Beijing-based, British-Chinese Motor Racing contact of AROnline’s asked me what had happened to MG Car Club China. He had, apparently, been attempting to telephone the MGCC China for about a month and so, when he was next in Shanghai, he drove out to the Club’s purpose-built premises only to find that they seemed to have been ‘shuttered-up’ for some time…
Anyway, in summary, Matthew Cheyne and his colleagues at Longbridge clearly have some challenging decisions to make about MG Motor UK’s mid-to-long-term future during the coming months – decisions which may also be influenced by events which are outside their control both here and in China. Here’s a question, though: would the majority of AROnline’s readers – even those who have been critical of the company in the past – be saddened if the MG marque was to follow in the steps of Chevrolet, Daihatsu and Proton by withdrawing completely from the UK and Europe?
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- Blog : Will MG’s slow boat to Europe hit Hinkley Point or the Brexit rock? - 29 August 2016