If you want to steal, steal from the best. It’s an old adage that still applies to the automotive world many times over, although no one is willing to admit it. The infamous Chris Bangle? Watch his “flame surfacing” on a large percentage of new cars around you right now.
Probably the best automotive “rags to riches” story in recent years is that of Kia. Having been around since 1944, it went belly-up during the Asian financial crisis in 1997. For most companies that would have been the end but not for the Korean manufacturer.
The Hyundai Motor Company acquired it and, investing heavily on European-based R&D facilities and plants, while also hiring former Audi designer Peter Schreyer who gave the cars a modern look, the carmaker’s sales rose year after year to the point where production can’t keep up with demand.
Kia’s strategy has been so successful that other ailing manufacturers openly declare that they intend to copy it. One of them is MG, a name associated with great past cars and mediocre, (some say dreadful) recent models.
Thanks to the mess that was the British economic policy in the 1970s and 1980s, the British automotive industry nearly ceased to exist. Despite being bought by BMW in 1994 as a part of MG Rover, the brand had a near-death experience when the Germans decided they had enough, the company went into receivership and production halted in April 2005.
Even though it saw the white tunnel of light, it came back when China’s Nanjing Automobile Group bought the rights to the brand and its assets, including the historic Longbridge plant, just three months later.
A couple of years later, Shanghai Automotive Industry Corporation (SAIC) acquired Nanjing. In 2009, the British carmaker was reborn as the MG Motor UK Ltd and in 2011, the first all-new model bearing the MG badge after 16 years, the MG6 compact saloon, was launched.
Although the MG6 went on sale in the UK last year in saloon and five-door guises, its sales record was abysmal, having sold only 15 cars in October 2011. This doesn’t come as a surprise since the “new” car is based on SAIC’s Roewe 550, itself a derivative of the 1999-launched Rover 75. Having only a sinle gasoline engine in a segment where diesels make up for the bulk of sales did not help much either. This has been rectified as, along with the 1.8-liter turbo petrol, the MG6 is now available with an in-house developed 1.85-liter diesel.
MG vice director of design Martin Ulharik, who used to work for Nissan, told Automotive News Europe that “in terms of product and competitiveness I’d say we’re not very far away from Kia already”. Furthermore, he predicted, “in five years, we’ll be well on our way”.
Ulharik’s statement might be proven as bullish as it sounds, as IHS Automotive senior analyst Ian Fletcher points out: “Kia [and Hyundai] have invested a great deal in marketing, sales networks and creating this positive brand image, which I can’t see SAIC being prepared for”, he told the news site. “I really don’t see them being able to get anywhere near where Kia is now by the end of the decade.”
Presently, MG is assembling Chinese-made knocked-down kits of the MG6 in the Longbridge plant. Its plan calls for the MG3 subcompact and MG5 compact to be added to the range in 2013 and 2014 respectively. A compact crossover, which was previewed by the Icon concept in last April’s Beijing Auto Show, is due in 2016 and a city car, for which no timetable has been announced, will follow.
SAIC’s number one priority is to make MG successful in Europe because it will also affect its home sales, as the group’s managing director of the Longbridge-based R&D headquarters, David Lindley, explains.
“If you just sell MG as a domestic brand, then it’s worth less in the Chinese market than if you also sell a car that’s competitive in Europe”, he says. He also sounds a lot more realistic about what lies ahead: “What it does mean there’s going to be quite a lot of patience in growing the European business.”
The Benelux and Scandinavian countries are the first European markets outside the UK where MG cars will be sold. Guy Jones, MG’s sales and marketing head, says that the reason is that “they’re small, easy to control and the cost of entry and the support required is controllable.”
The importers chosen also have a record of successfully dealing with Asian brands.
“A lot of these guys have built their business up by acquiring the Japanese franchise when they came in, the Koreans when they came in, so they’ve been researching the Chinese market for a number of years now”, he said. “They see us as the one to have.”
By Andrew Tsaousis
Story References: Autonews Europe
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