Why MG is failing in the UK

Pictures of MG and Roewe cars can be seen here.

MG managed to sell all of seven cars in Britain during November 2011. What I want to look at in my second blog post is what I believe to be the reasons for the failure.

I have test driven most of the MG Roewe range for various magazines and newspapers and whilst I do believe they are currently arguably the best Chinese cars on the market this may not remain the case for long.

In order to look at just how MG is failing I’m going to contrast it with the launch of Daewoo in the UK back in 1995. This was the most successful launch of a new brand on the British market in the last 20 years. Within 6 months Daewoo had nearly a 1% market share and by five years later this had risen to 1.61%. To put this in context Volvo had (in 1995) been in the market 38 years and only achieved 1.7% and this performance made Daewoo the 27th largest car company in the UK.

Daewoo had on the face of it many things which should have held them back. Firstly no one had ever heard of them and many couldn’t even pronounce their name! Secondly the cars they were selling were based on old General Motors designs. The Nubria was based on the previous version of the Vauxhall Astra and the Espero was based on an about to be replaced generation Vauxhall Cavalier.

MG with its British heritage is hardly unknown and unlike many Chinese companies does not come with a ‘strange name’. However like Daewoo they are challenged by technology. Whilst the design of the MG 6 is new, the engine is a hangover from old MG Rover technology.

In the UK the MG 6 only comes with a 1.8 litre turbo petrol (gasoline) engine and a five speed manual gearbox. Whilst the 1.8T engine is fine for the Chinese market, in the European market it is quite old technology and this shows up in its performance, something that many car reviews have picked up on. A bigger problem is that in Europe diesel engines become more popular the larger the car gets. Then there is no option in the UK of an automatic. MG decided that the automatic offered in China is just too antiquated for the British market. However, cars of this size usually have an option of a six speed manual or automatic.

Whereas in China MG has a range of cars and are also often sold together with Roewe cars, in the UK they have all of one model – the MG 6. Size wise the MG 6 is a problem. It’s not quite as big as a family car like a Ford Mondeo or Vauxhall Insignia (Buick Regal) but not as small as a medium sized car like a VW Golf or Toyota Corolla. When Daewoo launched they had a range, albeit two models, covering both of these key sizes.

So how did Daewoo overcome its handicaps?

Firstly they had a clever and extensive marketing campaign. To get over the name problem they cleverly came up with the slogan “That will be the Daewoo” a play on words of ‘that will be the day.’ Then their way of sales was unique. Instead of using franchised dealers they set up dealerships directly themselves in a response to what the car buying public saw were pushy and unprofessional selling techniques practised in many car showrooms. This along with very good levels of standard equipment and free servicing really drew customers in.

In MG’s case there appears so far to have been little marketing outside car magazine web sites. The result is few are likely to know MG are back. And unlike Daewoo, MG has no unique selling point. The name MG was associated with sporty cars but the MG 6 is nothing of the sort and does little to stand out.

People have been expecting UK sales of MG Roewe cars for years, I should know, I have written about them in UK car magazines. They have though taken far too long to start.

SAIC took a year and a half from production of the Roewe 550 to produce the MG 6. This would be fine if they were actually different cars, but really the MG 6 is just a hatchback version of the saloon. Most manufacturers launch a saloon and an estate or hatchback within 6 months of each other.

With the launch of the 550 and then MG 6 in China a lot of excitement was created in the UK motoring press. However, it then took around another 18 months to launch the MG 6 in the UK. Whilst some changes need to be made for the UK market was it really necessary to take so long? The initial excitement by this time had long since gone.

When the MG 3 goes on sale in the UK later this year it will also have taken over a year. SAIC really need to be launching cars in the UK a maximum of 6 months later. If they have ambitions of being a world player they need to start acting like one.

So how can MG turn it around in the UK? Firstly with the MG 6 they need to offer the new dual clutch automatic gearbox that’s due to launch in the 550. Whilst they are meant to have a new 2.0T engine under development if this can’t be launched soon they should consider producing a mild hybrid version using the 1.8T to improve fuel economy. Critically the turbo diesel with six speed manual, that has been spotted testing in China, needs to go on the market as soon as possible.

Next they need to start creating a range. That means putting the MG 3 and 5 on sale this year. This needs to be followed up with a concerted marketing effort with a large budget. The MG 6 joining the UK Touring Car Championship is a step in the right direction and whilst the sale of 100 of the car to Avis might have been an act of desperation at least more people will get to drive and see the car.

The most important thing is for SAIC to wake up about MG. When testing the MG 3 a company spokeswoman claimed there was little interest from overseas about MG. Certainly in countries like the UK and Australia there is a large amount of interest and the PR machine really needs to find out how to tap it.

  1. Now you see why those greedy mofos toedrpoed SAAB. Trying to protect IP, yeah right. They will sell out the whole US if they could. We bailed out General Morons so they could transfer more and more know-how to the Chinese (though thankfully this is just GM know how…)Buy Ford or Chrysler/Fiat if you want to back US R&D and manufacturing.

    • I am not sure about your mofo’s comment, but GM had had enough of SAAB and the continuous drip drip of losses every year of ownership, you can understand why they dumped it, but why not try and save it, they NEVER gave it a chance and never put teh money into SAAB like they have OPEL/VAUXHALL, why ?

      The Chinese have restarted production of the 9-3 and with a brand new 9-3 also in development, and due for launch within 2 years (the existing 9-3 under GM/Spyker is the basis of this car)

      GM decided to get snotty over the IP to the phoenix platform, which only had about 20% GM content, this has now been removed and replaced with in house IP, so the General can continue to “torpedo” other brands, namely Chevrolet in the whole of Europe and Holden in Australia/NZ.

      I read that you seen to believe that US products are the way forward, but i fear for the brands under the Chrysler umbrella, if FIAT do to them what they have done to FIAT, Alfa and Lancia then the writing will be on the wall for these once great brands also.

      The only brand that I feel will still be here in 50 years will be Ford, because if we have another 2008 financial crash, no governments will want to be seen to waste the money they did this time round.

  2. lots of incorrect info in your report, the MG6 had 500 cars go to Avis, The MG5 was never on the list to come to the UK, the MG3 underwent a vast array of tests and improvements to make sure it did not have the same issues on launch in the UK as the MG6 did.

    There were changes to bodywork, engine set ups, interior quality suspension set ups and then the decision to have a lot of rather tacky decals.

    MG, might have taken a step in the right direction with the MG6 joining the BTCC, but MGUK have failed considerably to actually promote it, and unless you frequently visited their Facebook page, the marketing was zero, MGUK seem to think that FACEBOOK is the be all and end all of all things.

    There are currently less than 20,500 “likes” on teh MG page, now, if just ten percent had bought cars it would have been good, but not even 5% have, and out of that number how many actually frequent the world that is Facebook.

    I will tell you why MG is failing in the UK

    Dire product – lack of engines
    Worse residuals in the UK (MG6)
    questionable reliability

    lack of range – The Magnette has failed in the UK
    The range of cars only has kit to differentiate them
    The price is really out of the ball park
    The constant offers and price reductions do not give customers confidence.
    No sporty cars
    No estate
    No coupe

    In these days when the mother company is one of the biggest in the world, to not have and engine range, gearbox range and a decent range of cars is just not acceptable, the MG3 is the same, but at least they have the price roughly right, but then they still only sold in total 75 cars in November.

    That 75 figure alone tells you far more than the rest of my diatribe, so in a nutshell, MG China, don’t give a flying fig about the UK, and are only keeping the brand alive in the UK, for the kudos of using British built, British engineered and so on,
    until MGUK get of their fat ar**s and actually demand cars that are suitable for Europe, we will be getting third world cars.

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