Opinion : MG’s electric dreams could soon become a nightmare…

MG4

Just when you think things are settling down back to some kind of normality or, in this case, some kind of badly needed professionalism, things become rather cock-eyed once again. I am, of course, talking about MG Motor UK Limited and Car Dealer Magazine’s recent report that the company is looking at terminating some of the smaller dealerships which currently hold an MG franchise.

In a roller-coaster journey that’s been trundling along bucking and jolting from one cock-up to another since 2008 (yes, folks, that’s 14 years ago) MG Motor UK has gone from being a generally laughed at concern by pretty much all of the trade with a poorer reputation than any previous owner of the brand to, dare I say it, a serious force to be reckoned with partly because of this wretched EV craze.

The marque with the shortest name has gone through the longest trauma experienced by any car company I care to think of – so much so that, if we treated a family pet and allowed it to suffer what the MG name and its loyal fans and enthusiasts have gone through, we’d be arrested and thrown in jail. First, we had the MG6 – blessed with near class-leading road manners and impressive levels of equipment and, of course, the TF LE500.

Missing the target

MG TF LE 500

The MG6 was sadly never fully developed and failed to sell in any decent numbers owing to a desperate lack of public awareness. The TF LE500 once again failed to hit the spot by a country mile thanks to a criminal lack of advertising.

One former MG Dealer Principal once told me – partly in jest – that the LE500 was called such because, ‘that’s how many weeks it took us to sell our quota of them’. Despite the hilariously bad way the company used to be run, the cars themselves weren’t that bad to drive – partly due to the small team of ex-MG Rover Engineers who were kept in employment to finesse the cars and make them suitable for British tastes.

Owners of those early cars soon found out the hard way the meaning of the old trade adage of, ‘there’s no such thing as a cheap car’ by the way of poor spare parts supply, very little support at manufacturer level and part exchange resale values almost as worthless as second-hand copies of last week’s newspapers.

The Peter Principle

The company previously employed some proper buffoons in some very key positions as well. I once went to an MG model launch in Oxfordshire when I sloped off for a sneaky cigarette and found myself around the corner of a wall literally feet away, but unseen, to the then Sales and Marketing Director and one of his colleagues who were also enjoying a crafty smoke.

They were laughing away at how the public will buy, ‘any old sh**e’ and that all car journos and reviewers were, ‘uninformed w**k**s’ – oh, I kid you not readers, it’s all 100% gospel. My general thoughts on MG had always been based on the fact that the cars were acceptable for the money but, in my opinion, totally unviable as a purchase owing to dodgy back-up and some serious berks not fit to run a bath, let alone a car company.

Things start to look up

MG 3 and MG ZS

Then, slowly but surely, MG Motor UK started to buck its ideas up. More recent models such as the MG GS, the MG3 and the ZS started showing a little bit of design flair. The quality got better too, and I still think the current MG HS is a pretty good-looking motor with a convincing enough interior to match, if not beat in some areas, the current crop of five-door SUVs.

It’s not my cup of tea – a nice roomy saloon or estate is more my taste – but you have a good look at an MG HS in any colour other than Creda white and you’ll find it hard not to be impressed at the paint application and overall fit and finish. An acquaintance of mine runs a PHEV version and, despite some initial ribbing from myself, he seems to be totally smitten with it – so far.

And now we see the company pedalling their current range of electric vehicles and finding themselves in the Top 10 sales charts. Good for them I thought, after all the past blunders and PR disasters, the company has finally grown-up, learned to how to portray itself as a serious contender in a seriously cut-throat market and – more importantly – build a cohesive range of cars you no longer look like a berk or have to justify driving. The one bugbear that haunted MG was the Dealer Network and it’s clear to see why. A vehicle franchise is a massive investment in money, time and equipment – I won’t go into detail here but, for those not in the know, running a franchise is a huge gamble, especially for a small selling or sub-prime brand.

On to the dealer story

For all of the faults at the top of the tree, MG is generally blessed with one major ace card – the family dealer group. These small enterprises tend to offer a level of customer care that eclipses some of the premium brands. One such example of this was a former Lada dealer who once told me it made no difference if the totem sign said Lada or BMW as the customers were buying into his reputation of 40 years of honest dealing.

Many current dealers are run by enthusiasts – that rare breed of enthusiast who can be passionate while still having a nose for opportunity and business. I’ve often been a bit disappointed with some so called ‘brand fans’ running businesses or franchises.

Many of the smaller dealers back in the Rover days found themselves chopped off at the ankles in the mid-1990s when BMW wanted out of the retail dealership network opting only for outlets capable of selling volume numbers. A brand like MG needs the kind of dealer who goes the extra mile for their customers in times where the wheels fall off the deal so to speak.

Sold by the passionate

Now, though, it seems that, after a few months in the limelight, MG has got cocksure and decided it no longer wants those small local businesses unless they invest in much bigger premises.

These are the same dealers who have stood behind MG Motor UK through thick and thin going way above and beyond the norm in terms of placating owners and, to some degree, shielding them from MG’s inconsistent levels of customer care. Not that long ago, they were almost giving away MG franchises inside Friday’s copy of Exchange & Mart. There were ‘pop up’ franchises in some of the worst used car supermarkets too.

Keith Adams and I visited one in the East Midlands a few years back and, after leaving and enjoying a reflective cafe coffee, we genuinely didn’t know whether to laugh or cry – if you don’t believe me, ask him. Not a single soul employed there had any kind of product knowledge…

Think before you jump

MG makes big bones about getting some of the big dealer groups on board to take the MG totem for their forecourts. Believe me when I say it isn’t for the customer care, it’s the way they can cash in and make a killing in the process. In terms of these bigger dealers, one such company is so bad that there have been websites and Facebook groups set up purely for customers to vent their anger and frustration towards them.

MG needs those small to medium businesses in key areas, the company needs rock solid, fair-dealing dealers and, just because they don’t operate out of premises that emulate The Shard, doesn’t mean they fail to make the grade in terms of really looking after the customers.

Since 1988, I have been around the block a few times in terms of industry experience – especially at dealer level – and the cheapest deal isn’t always the best deal is a mantra I often use. You go for the deal you are comfortable with so, if the salesperson made you feel special, wanted, valued and above all at ease, is that not worth so much more than an extra £200 off, free floor mats and a bucket of heartache when it comes to the crunch?

If I were you MG, I would seriously be reconsidering your current dealer strategy.

MG4 rear view

Mike Humble

40 Comments

  1. That’s exactly what Hyundai did it the 90s. They had dedicated small garages as early dealerships, then once those garages had begun to build sales volume, they were asked to move to bigger and better premises.

    • Everything you say is so true! I remember a pair of Orange LE500’s sit with a local dealer for easily 2 years! The BL/Rover troubles are famous as was the great Chinese takeover but the UK dealer landscape just isn’t ready for the fast paced Chinese business strategy. The MG brand is far from proven and those small, passionate dealers are essential in educating and driving the brand into the market.

  2. Just a quick note by way of an update to the article above – Tom Sharpe, the News and Features Editor of AMonline, published the piece at the link below shortly after the Car Dealer Magazine story linked from the first paragraph of our article appeared:

    MG Motor UK network will have capacity for 90,000 sales by end of 2022, Tom Sharpe, News and Features Editor, AMonline, 25th August, 2022

    Tom Sharpe interviewed MG Motor UK Limited’s Guy Pigounakis and, in what might quite reasonably be interpreted as an at least partial – if not total – rebuttal of the Car Dealer Magazine article, he commented:

    “When you are a challenger brand the reality is that where you don’t have representation you don’t sell cars.

    “I don’t subscribe to the mindset of other brands who feel that if they slim their network from 160 to 100 sites they will still achieve the same sales and push more volume through their remaining network.

    “It’s very easy to underestimate the role dealers play in generating sales. I believe that probably more than half of car buyers buy because of a relationship with a local retailer and not with a brand.

    “So, we could perhaps be accused of approaching the market in a very traditional way in a sector that is changing, but I believe it’s still the best formula, a tried and tested one that that is proven to work.”

    Any AROnline readers who want to find out more about Guy Pigounakis’ background in the Automotive Industry can do so by following this link to his LinkedIn profile – interestingly, from February 2000 to January 2004, he was MG Rover Group Limited’s UK Commercial Director…

  3. I concur with Mike’s observations. I also favour the traditional Hatchback / Saloon / Estate car. Our local MG dealer is a former longtime family run Nissan & Mitsubishi dealership (since early 1980s.)

    In the light of this news, it will be interesting to see if another change of brand is in the pipeline.

  4. One key issue not taken being taken into account here is the attitude of MG’s wholesale finance partner. You see dealers don’t get their stock on sale or return. As soon as the vehicle leaves the dispatch yard it’s put on to a stocking plan and the dealer becomes financially responsible for that vehicle. If it’s not sold after 90 days the dealer has to pay the full wholesale cost of that unit to the finance company.

    Now, when you’ve got a range of 4 – 5 different cars and are expected to stock and display at least one of each, plus demos, plus customer cars on order… then these figures start adding up to eye watering sums of money for small independent dealers.

    Back 2008 MG were using GE for their wholesale financing and they were fantastic to deal with, very supportive. Unfortunately, around 2012 they changed over to GMAC… and they couldn’t give a Castlemaine XXXX about smaller dealers. They only wanted the big boys, or cash rich businesses who wouldn’t leave them adoption headaches.

    Given the current precarious state of the economy, I wouldn’t be surprised if some dealers are culled because they’re seen as too risky, despite whatever volume they’re kicking into the market.

    BTW – I don’t know if MG still use GMAC as their wholesale provider, but it will be a major finance provider of some kind.

  5. I find this interesting because here in the South West we have a number of Subaru dealers in some of the most unlikely of territories, such as on the edge of small rural towns. The cars aren’t cheap and you wonder how these dealers sell enough cars to justify their investment in the franchise. But they do because they tend to be family owned who employ staff that go that extra mile for their customers. Indeed, one of them in South Somerset used to be a former ARG/Rover/MG Rover Group dealer and they were noted by the local community and their customers for going that extra mile both in terms of servicing work, body repairs and also when selling new and used cars. That same approach continues with the Subaru franchise.

    If such a strategy can work for a brand such as Subaru which has a broader product range than MG offers and a more consistent recognition in relation to product quality and reliability, not to mention customer service standards, then I fail to see why it wouldn’t work for the MG brand.

    • @ David 3500, Cumbria’s only Subaru dealer is stuck on the end of a grubby side road in an industrial estate in Carlisle, which hardly does much to raise the profile of the brand, even if Stan Palmer is one of the better local car dealers (his Ford and Honda dealerships have a good reputation). I imagine Subaru’s buyers, who want something more left field than a Nissan SUV and tend to be a small, loyal bunch, don’t care that their cars aren’t sold out of some plate glass showroom next to the northern ring road, like most other Carlisle car dealers.

      • Not sure when you were last in Rosehill, but Stan Palmer have not been Subaru for nearly 18 months – they moved to the large ex-Mercedes showroom and took on Suzuki and Honda. Subaru is now in a grubby showroom in Penrith by Ullswater Road Garage. I work for Lloyd JLR and we go above and beyond for our customers.

        • Hello, Chris, I was last in Rosehill 2 years ago and it did look like the dealership was on the way out. However, using another down at heel dealership mustn’t do much good for Subaru, whose products are quite expensive and niche.
          Lloyd at Cockermouth, who sell BMW and Mini, have a good reputation that stretches back decades and the Carlisle dealerships are the same.

    • David – I agree Subaru is an interesting case.

      Subaru has about 70 UK dealers and they have just 0.07% market share. In 2021 they sold 1,014 vehicles which averages just over 1 car per dealer, per month. Some months this figure is even lower – 53 cars in August 2022 which means that some dealers sold none. For some of these dealerships, selling Subarus cannot be the main source of their income. They must survive by selling another manufacturer’s models or by selling used cars purchased at auction.

      The dealership to which you refer only sells used cars and appears no longer to have the Subaru franchise. Subaru UK restructured their network in 2021 – https://www.motortrader.com/motor-trader-news/automotive-news/subaru-restructures-uk-network-exits-new-appointments-26-02-2021

      • @ Matthew Semple, that really is a low figure and no wonder the dealership in Carlisle went as there was probably no money in selling such a low selling brand. Apart from a couple of old Imprezas, newer Subarus seem to be as rare as hen’s teeth. Rather a shame, as Subaru were probably the first manufacturer to sell Cortina sized and priced four wheel drive cars that were a less rough alternative to a Land Rover. I can remember the 1600 and 1800 GLF flying out of a showroom in Northumberland in the early eightues.

  6. I read in the press several months ago, MG closed their order book for 2022, they had sold their Carbon quota, a CO2 emissions licence or liability, to another manufacturer, consequently MG would not supply new cars in the UK until 2023 or beyond.

    I am at a loss to reconcile the article with the information I read in the press.

  7. There is the prospect that car dealers will lose the closed shop of a franchise to become Car Sales Agents, the dealer will not be tied to a manufacturer brand, the dealer will sell a car of any brand the buyer seeks , to fulfill the sales order, the dealer sources the car from the manufacturer on the behalf of the buyer. This is a major change in the manner in which cars are retailed.

  8. Completely agree Mike. Skoda have been guilty of turning their back on the customer-focused, small, family-run dealers who have the brand credibility 15-20 years ago.

    I’ve got a company provided Ford Kuga and get the servicing done by the family-run, small garage on the local town; rather than the glass palace multi-site operation in a larger town nearby.

    • Completely agree about Skoda.

      I bought two new and they were extremely attentive. However a move to flashier premises coincided with a collapse in the quality of their service department and then sales went the same way.

      Having a good local dealer can bring and keep customers, especially as a lot of people have more loyalty to people over marques.

  9. Good customer care is essential as nothing is worse than buying a car and having to deal with off hand staff, work not being done properly and work being invented at MOT time. I still prefer to pay a bit more and use local family dealers than be tempted by Arnold Clark and their huge showrooms, as I know from several people that Arnold Shark is a terrible company to deal with.

  10. Are MG not in danger of making a great mistake once made by their forebears. Was it not one Filmer Paradise who orchestrated the withdrawal from hundreds of BMC/BL little garages – that then took on mostly Japanese marques thus securing another nail in the BL coffin. Who was it who said a company that doesn’t know it’s history has no future.

  11. I wonder if Dacia are eyeing up MG dealers that are losing their franchises. This is probably the only genuine budget brand left now, whose cars have been consistent sellers since they were launched over here 12 years ago, and whose Sandero, Stepway and Duster have all the market bases covered. From all accounts, Dacias are fairly reliable cars and while not the most thrilling cars to drive, are perfectly acceptable cars for the money.

  12. I know a couple of friends who have Dacia Sandero’s and they seem well happy at the moment. Another car from Dacia that nearly appeals to me is the Logan MCV Estate car, looks like a useful carrier without the frills.

  13. My local Renault dealer also sells Dacias, which is probably a typical set up for showrooms.

    I see plenty of Dacias around locally so they probably do a fair amount of business.

  14. The latest Sandero is quite a good car, using more modern Renault technology than the dated original model and being acceptably refined and economical for long journeys. Sad to see the no frills Sandero Access model go, as this proved there was still a market for stripped out base models, but buyers nowadays demand an infotainment system, air con and electric windows on even the cheapest cars.

    • I think it is the shortage of semiconductors which has led to the end of the basic Access model.
      The carmakers would rather use their limited quota of semiconductors on the high profit versions of the car. A friend tell me the shortages of semiconductors is predicted to last another 3 years

  15. As this is an MG thread, I note that CAR magazine – not usually a fan of MGs or Rovers – has placed MG at #44 in its list of “top 60 car makers” this month. They seem to be confused as to whether the British or Chinese MG is the cool company. This month’s list appears to stop at #36 – perhaps we will see #s 1-35 next month – will Rover be there?

    • They are a Chinese company through and through and that’s why i won’t be buying any MG anytime soon, no matter how good and yes I could afford one if I wanted one.
      China is a very aggressive and authoritarian state and will threaten, bully and blackmail any Govt, Country or company if it thinks it can get away with it and it benefits the Chinese state and its plans of increased influence and expansion.
      I know MG is not the Chinese Govt but it is state owned (so is effectively part of the Chinese state) and Chinese State Security Law forces companies based in the country to “provide assistance with work relating to the state” as was was admitted by a senior Huawei official. Hence why the UK stopped installing new Huawei 5G kit and has said any existing kit will be removed by 2027.
      Now I’m not overly worried about an army MG’s being remotely controlled by the Chinese Govt but I don’t want my cash supporting the Chinese economy so wherever possible I do not buy anything Chinese. And yes I know they make loads of components that go into stuff but I do some research and if I can I don’t buy anything I know is Chinese built.
      So that why I have a crappy old MG and a crappy old Rover not a shiny new Chinese one and have a Samsung Galaxy not an iPhone.
      I’m sorry MGR has gone but a Chinese car with the same badge does not get to keep the history and heritage of Austin, BMC, British Leyland and then MGRover.
      And I also wish there were no articles about them on here. After all this is AROnline not SAICOnline.

      • Well said. Can’t understand this company’s continued coverage on site. The octagon no longer signifies what it did.

        • No problem with Vietnam and from what i’ve read on the web, MOST of samsunbgs phones for Western Europe come from there. Their biggest manufacturing facility is in India, but thats mostly for the Indian Market. They closed the main Chinese manufacturing facility in 2019 and the ones now made there are mainly for the Chinese market. As i said i TRY nit to buy Chinese stuff, esp from Chinese Companies and even more so from State owned ones like MG (via SIAC) but its very difficult to cut out every component. Maybe if more people bought car from British Manufacturers back in the day we might still have a car industry. Kind of like the French do, oh and the Germans oh and Even the Italians. But hey hoy we mainly just knock a few together for Japanese, French, German, Chinese, Indian, manufacturers and build the odd niche sports car.

  16. Of course, most “younger” buyers in the market don’t know the long history of British MG (or are not bothered when it comes to buying their next car). a Shame…

  17. @ flan, MG to most of us on here means such cars as the MGB( not necessarily the later rubber bumpered ones) and MG versions of the Austin M cars and noughties Rovers, but to younger buyers the badge will be seen as one adorning keenly priced SUvs and crossovers with long warranties that are like Chinese Dacias. I think the badge embraces both camps and as there is vastly more profit in SUVs than expensive to make and slow selling two seater sports cars, this is how MG has evolved.

    • @ Glenn, I go along with that. MG has changed from the Sports cars and badged hatchbacks / saloons to Crossover/SUV types… not my area of interest.

      Having said that, the most thrilling MGB I rode in was my colleague’s orange MGB GT V8 (N reg) and it didn’t have the black rubber bumpers

    • The 80’s MG’s are awful badge engineered Austin Rover machines. It was much better when Rover ditched the MG branding on the hot variants of their cars.

  18. I can’t understand the manufacturers fascination with the large dealers groups, whose customer service is usually terrible.

    Ford are busy closing dealerships at present and then wonder why there market share is down. (Appreciate they are currently with the chip shortage concentrating on profitable van sales) but there are now more Kia dealers than Ford local to me. When will they realise customer service is more important than a flashy showroom

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