It seems over the last year or two, I see MG’s everywhere. Not the snappy sports cars of my youth, MGB, and MGA, nor the MGTC or TF of my youthful fantasies, but boxy little SUV’s that look pretty much like every other boxy little SUV on the road.
The thought was prompted by a conversation with a friend ‘consulting’ his son as he considered buying his first car. Dads first choice was a Toyota Camry, reputed to be ‘bullet-proof’ but boring. Perfect he thought, until told there was a 2-year waiting list. Besides, his son would not want his friends to see him in a Camry.
The wait for a new MG was 3-4 weeks. Tempting, but MG? Built in China, owned by an anonymous Chinese conglomerate. Does a little Chinese SUV deserve the MG moniker?
MG has a long and storied history.
It started as a promotional item for the Morris dealership in Oxford in the 1920’s, which is where the name came from: Morris Garages. MG bounced around the dissolution of the British motor industry, being successively owned by BMC, British Leyland, and the MG Rover Group until that final entity went to the scrapheap in 2005. The Nanjing Auto group bought it from the receiver, which later merged with the Chinese conglomerate Shanghai Automotive Industry Corporation, SAIC. The first models from SAIC carrying the MG badge emerged in 2011, after a very large engineering and production investment.
My sense that MG’s were everywhere was not wrong. The trend in sales is up, strongly. In December 2022, MG sold more new cars in Australia than both Mitsubishi and Hyundai. 5,194 to Mitsubishi’s 4,927, and Hyundai’s 4,434, a first. While both outsold MG in the full year, it seems only matter of time before MG overtakes them on that metric as well. Its rise has been meteoric, from 3,000 cars in 2018 to 49,582 in 2022.
Before we wax lyrical about the power of the brand, and the equity it may retain from the long ago glory days, it might pay to look at some of the facts that underpin such a stellar performance from a very basic marketing perspective.
Product.
The product seems pretty good. Even that well known sceptic John Cadogan has a nice word to say about the value delivered, which he rightly points out is an equation with quality on one side, and price on the other. I am the last person to comment on aesthetics with any authority, but to me it looks OK. If you trawl owner websites, you may get the impression that the quality leaves something to be desired, with a number of recurring shortcomings. However, you get what you pay for, and MG seems to be a practical price driven offering, burnished by all the cheap bling touted as features by the PR.
Price.
Against its obvious competitors, MG has a substantial price advantage. They may be buying market share, but it is clearly working. Add in the 7 year warranty, and the price package is winning fans. Combined with the OK product, the ‘Value’ is clearly being seen.
Place.
There are currently 153 MG dealerships around the country. Most are multiple shops, but who really cares? That number combined with the sales numbers means you can have some confidence in the availability of spares, and resale value, and you do not have to travel too far to go and sit in one, and try before you buy.
Promotion.
Here is where MG have done a surprisingly good job. Surprising to me because most car marketers seem to get carried away by their own bullshit, failing to see the offer through the eyes of a potential customer. MG has combined the brand building job with the short term sales activation job better than any car brand I can remember. It helps that they seem to have buckets of money, but it is easy to waste a lot of that, which they have not done.
The local ads run on TV position the product clearly, young, aspirational, and skewed towards female. A look on YouTube, shows some pretty slick UK based ads featuring among others Benedict Cumberbatch adding British cred and male sophistication to the Australian ads. This is long term brand building material. MG has a 5-year significant sponsorship deal with South Sydney Rugby league, and the PR and short-term sales activation machine has been cranked up to ‘high’. For anyone in their target market looking to buy a car, MG is hard to miss. The offers are simple, go across the range, and will encourage at least consideration.
Strategically, MG is on a well-trodden path worn first by the Japanese, followed by the Koreans. Start with a narrow range at the lower end of the market with cheap, mass market cars full of bling, long warranty periods and extensive investment in customer facing infrastructure like dealers and spare parts inventory. Then, progressively move up the quality and price scale, while expanding the range as they get better at designing and building cars. What took the Japanese 40 years, took the Koreans 20 years, seems to have taken MG only 5 to have made big inroads.
When will we see an MG F1 team?
Toyota had a shot at F1 between 2002 and 2009, and while not a winner, did generate credibility. BMW has a long history with good results in F1 from the 50’s to withdrawal in 2009, while Mercedes upped its game in 2010. Since 2014 Mercedes has won every drivers and constructors championship, an unprecedented record at the extreme automotive cutting edge, where fractions of a second are the difference between winning and being an also ran. Mercedes in this time has also won in the car sales race, at least in Australia where they closed a big gap, then overtook class rival BMW in 2018, and have not looked back. This seems a natural progression for MG to follow, and any success at all would rewrite the global perception of Chinese engineering.
My conclusion is that MG is a bit more than just a label transposed onto an entry level range of cars with none of the ‘gravitas’ associated with the MG brand of old. It is a genuinely good effort to build a brand from the ground up, taking a helping hand from whatever MG heritage may have survived the implosion of the British motor industry. Worked everywhere into their marketing material is the MG logo, unchanged from the 1920’s creating a link, they hope, to the values they wish to rebuild. If nothing else, the combination of low price, long warranty, brand recognition, and lots of bling in a unit that delivers good value for not a lot of money is a good mix for customers. It also indicates to me that they are here for the long term, as it will take a while to recover the very substantial investment that has been, and continues to be made.
BTW, my friends son ended up buying a 2004 Jaguar, built while Jag was owned by Ford. Bit of a risk on parts and reliability, but a nice car at half the price of a new MG, and not a Chinese label in sight.
