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By Moses Akaigwe
While the sheer volume of new Chinese vehicle manufacturers entering the UK market at the moment is unprecedented, they are not treading uncharted territory.
For that path was taken by MG Motor UK when, under the ownership of Chinese automotive giant SAIC, it relaunched in the UK in 2018.
Since then, it has established itself as a top-10 brand, selling more than 400,000 cars in the UK – including more than 100,000 EVs – and grown its dealership network to around 160 sites.
“I’m not being big-headed here, but I think that all the new entrants have looked at MG and said ‘well, it they can do it, we can’,” says Geraint Isaac, head of fleet sales at MG Motor UK. “We’ve sort of set the template in that respect.”
However, Isaac says there are several key differentiators, which give MG an advantage. One is that it has an established brand identity – “the MG brand is now more than 100 years old”, he adds, while a UK-based design studio and engineering team gives the range a heavy European influence.
On top of this it has a vast network of franchised dealers, providing 90% coverage of the UK.
“Most people will live within a reasonable distance of a dealership, which is a real plus point, especially from a fleet perspective,” says Isaac.
“For example, although we’ve had C-segment SUVs, we didn’t have a fully-electric C-SUV until the MGS6 EV, so all the volume that will come from those will effectively be conquest business.
“We see MG IM5 and MG IM6 as predominantly fleet vehicles and based on the order take we’ve had so far, the high percentage of them are fleet orders.”
Evolution of the business
MG says it is now in its third phase, which it calls ‘re-orientation’, in the UK as its growth plateaus due to a huge model cycle change – limiting the number of vehicles which have been available as the outgoing models were on run-out – static network growth and the impact of new entrants.
This follows the initial ‘foundation’ phase between 2018 and 2020 when the brand established itself in the UK, gaining a 1.13% market share and growing its dealer network to 125.
After this was its ‘acceleration’ phase when its model range expanded with key vehicles in volume segments, while its dealer network grew to 166 and its market share increased to just over 4%.
The change in description for MG’s business evolution does not mean the brand is standing still , however, as it launched four new models last year: the MGS5 EV, MGS6 EV, MG IM5 and MG IM6 battery electric vehicles.
These joined the existing MG3, MG4 EV, MG ZS, MG HS, and MG Cyberster ranges, giving it a nine-model line-up – including five BEVs – which it says covers 90% of the market. A revised MG4 EV is being launched soon, which will mean that the brand’s oldest new car on sale will be the MG3 which was launched in April 2023.
“Some of the cars we launched last year are in segments we’ve never been in before,” says Isaac.
“For example, although we’ve had C-segment SUVs, we didn’t have a fully-electric C-SUV until the MGS6 EV, so all the volume that will come from those will effectively be conquest business
“We see MG IM5 and MG IM6 as predominantly fleet vehicles and based on the order take we’ve had so far, the high percentage of them are fleet orders.”
He adds that up until the end of November, MG had taken nearly 2,500 for the MG IM5 and MGIM6. “We’re very pleased, considering the cars were only launched in September.”
Following a period when the brand had made a commitment to its dealer market that it would focus on the private retail market – “an area of the market which is the most profitable especially for our dealer partners”, says David Allison, head of product and planning at MG – its new models means the brand is strengthening its fleet operations.
Its approach saw private sales rise from 21,218 in 2024 to 33,618 last year (an increase of 58.4%), while its true fleet registrations were relatively flat – 17,934 last year, which was a fall of just 1%.
The refreshed model line-up will give the brand the opportunity to strengthen its position in the fleet market.
This is reflected through MG strengthening its fleet offering. “When I came into MG in 2019, the remit for me was to grow fleet,” says Isaac. “We’ve done it strategically and without any sort of distress in the market.
“We’ve also gradually grown the team, so will end up with three end-user fleet managers, plus contract hire leasing managers for north and south. Most of those have come on board in the past 12 to 18 months.
“One of the reasons we’ve focused on leasing manager roles is the product lends itself to the market but, frankly, we are probably only scratching the surface.
“The remit for these guys is to challenge the leasing companies on RV positioning and SMR etc., but also making sure that we’re front and centre in their minds for when it comes to quoting.
“We’ve been doing roadshows where we’re getting their staff to touch, feel and drive the cars so when they are talking to customers and they ask for a quote on competitor models they can then say ‘have you considered this as an option?’.
Ready for the challenge
But Isaac knows there is no room for complacency. He says: “Not for one minute do I think it is not going to be challenging.
“The market has been disrupted, not just by the introduction of the new entrants, but by the established manufacturers that are fighting to meet the ZEV Mandate targets.
“We are seeing some brands basically saying ‘right, we either give that level of discount which may be, say £10,000, or pay a £12,000 fine’.
“I think some have the mentality of saying that losing that money is better than paying a larger fine, but it doesn’t make any business sense at all.
“It can’t last, it can’t go on forever. I genuinely think there will be some casualties over the next couple of years and I think it’ll be a mixture of some of the new entrants who may not survive, but I also think there’ll be some established brands that we might not see going forward, which is not nice to see.
“But as I said earlier, the pie is not getting bigger. The UK car market is circa two million registrations a year; just because there are more manufacturers selling cars doesn’t mean it is going to get any bigger.”
In the Nigerian market, the MG brand of vehicles is sold and serviced by one of the biggest names in the auto industry – Stallion Motors, through its subsidiary, Stallion MG Automobiles.
There are indications that Stallion MG Automobiles is introducing some new MG models into the Nigerian market, including the MG RX9, an all-new 7-seater premium SUV.
It was learnt over the weekend that a new showroom on Akin Adeola Street in Victoria Island, Lagos, has already been prepared for the new MG vehicles.
● From FleetNews
