Published on January 15th, 2020 | by Maarten Vinkhuyzen0
MG Is Back From The Grave In Full Frontal Attack On European Car Market
January 15th, 2020 by Maarten Vinkhuyzen
After the bankruptcy of the iconic British carmaker MG/Rover, the MG brand name was sold to a Chinese company. A few years ago, it was bought by SAIC Motor Corp. (formerly Shanghai Automotive Industry Corporation). This is about the brand name, the logo, the goodwill, claims to its history, the models, and intellectual property. The production facility was used for a few years, but ultimately all production was relocated to China. A design center and a sales and marketing organization constitute the current MG Motor in Britain.
SAIC is the largest Chinese carmaker. It is #7 worldwide in passenger vehicles, and #4 in electric vehicles. It can compete on price, quality, and design with every carmaker in the world. What it lacks is reputation outside China.
Now SAIC is coming to Europe with the MG brand, using the nostalgia and romance associated with that name. It is offering a very appealing, fully electric, small SUV for a very competitive price. The first shipload arrived in the Netherlands just before the lowering of the incentive in the country. Over a thousand new EV drivers decided to go with this new unknown model, illustrating the value of the brand name.
The purchase decisions were likely based on reputation, a few reviews, and some user stories from the UK, where the model reached the market last summer. Based on the reviews and specs that I have seen, it is a risk worth taking for the price MG is asking.
With its pricing policy, MG is trying for a new positioning in the market. Like Tesla, there is a single price for Europe. Only taxes and currency conversions create a difference. Discounts are not allowed. The dealers and salespersons have to convince potential buyers of the quality of the car and extras like good advice and services.
The Belgian importer is very clear about the hurdles to selling the car in Belgium. Asked what the chances on the Belgium market would be after the small tsunami that landed the last two weeks of December in the Netherlands, the answer was clear: “The chances are not the same.”
The story was the same on all the stands offering plug-in vehicles at the Brussels Motor Show.
The four Belgian governments (one federal and three regional: Brussels, Wallonia, Flanders ) offer no incentives to speak of, just small tax benefits that might apply to some buyers but are uncoordinated and hard to find.
There is no consistent policy. Today’s goals and regulations are contradictory, and will likely change before the car is delivered. What they will be next year or even in the second half of this year, nobody is willing to guess.
There is no charging infrastructure to speak of, no central or local planning to provide a charging infrastructure. There are some private initiatives and foreign companies starting to build networks. Tesla, Ionity, and in the future Fastned are coming to Belgium. Oil companies and some retailers are trying to get a position in the new charging market. The best thing they have going for them is that there is a lot of expertise in all of the surrounding countries.
While most Belgium drivers, journalists and auto professionals are still not well informed about electric driving and the coming transition, the market is showing healthy development. It is leaving the innovator phase and entering the early adopter phase of the technology adoption life cycle.
To overcome these marketing challenges, MG has a simple plan of action. Besides being very clear on prices, it is a fully electric only brand.
On the stands of the large carmakers, there are more fully electric vehicles, but they are hard to find between the dozens of non-electrified models. And many marketing departments have discovered the hype of electrification and now stick the moniker “Electrified” on everything that has more than the standard 12 volt battery system.
MG has just two MG ZS EVs on the stand. That is what the company offers, simple and clear. There is a team that collects only leads for electric driving, with a single sales pitch. We know from Tesla how effective that is.
The car is a small SUV, with a very aggressive price. The price is made possible by a smaller battery (45 kWh) than most competitors — not the first choice for long trips with the whole family, but perfect for hauling stuff and people around town and perhaps weekend trips.
After the show is over, the sales attention will be shifting to companies looking for a green/clean/responsible machine that are willing to put chargers in their parking lots and present the MG as the preferred company car. This is an approach that asks for a lot of legwork, but it can also be very successful.
The other approach the Belgium importer is planning is an awareness campaign. The standard 25 minutes test drive offered by Tesla is not enough for many prospects of this vehicle. The “buy the car and return it with money back when you don’t like it,” Tesla’s alternative for short test drives, is just too radical. When more vehicles become available, they will offer test drives of several hours or more to let prospects really experience electric driving.
I have personal experience with a longer test drive. Over 20 years ago, when the kids were still in diapers, I got a call from a dealer that he had a car available for a test drive on Saturday. I had to decline the offer, because we planned a weekend away to family in the country, a three hour drive. “Come get the car Friday afternoon. That is perfect for a test drive. Exactly the kind of use you are looking to buy a car for.” Okay — I was sold. We have had the car for nearly 20 years.
If MG has found importers in the other European countries as effective and inventive as the organizations in the UK, the Netherlands, and Belgium, MG will become a major brand in the European electric vehicle market soon.
It looks like China is not repeating the mistakes of Japan, South Korea, and India, which started with cheap low-quality offerings at the bottom of the market. First with Polestar and now MG, the Chinese enter the market with very attractive, good looking, and high quality products. New entrants like this, without a tailpipe, are always very welcome.