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We need to be unique and disruptive, says MG Motor India President Rajeev Chaba

Nandana James | | Updated on: May 15, 2019
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The Chinese-owned British carmaker MG (Morris Garages) Motor made its debut in the Indian market on Wednesday by unveiling the Hector, which the company claims is India’s first internet car — with more than 50 connected features — as well as India’s first 48V hybrid SUV. In an interview to BusinessLine , Rajeev Chaba, President & Managing Director, MG Motor India, talks about Hector’s features, differentiating factors and the company’s strategy in India.

What is the strategy for MG Motor in India given that the top two players take up around 68 per cent market share, and the foreign players have like a 1-2 per cent market share?

We know that the market is pretty tough in India, and a few players dominate the industry. So, it’s very clear to us that we need to be unique, different and disruptive in many areas, and disruptive not for the sake of being disruptive, but it has to be relevant and meaningful to the consumer.

So let’s talk about the product. It is disruptive and has got many things for the first time in the country like Internet car, 48 volt hybrid, and also has got a lot of segment-first features. Also, our base model is going to be loaded, you know, in terms of safety, in terms of convenience and in terms of rear seat convenience, affordability.

Where do you plan to position the Hector?

We have a capacity of 80,000 units per year, but the Hector is only one part — we are about to finalise four product launches (total, including Hector) by end of next year (by December 2020). Hector’s segment, as you know, is not a big segment. So again, we are not really talking about big volumes there, but hopefully, we should be able to take a fair share of the segment. So let’s see how it goes.

The auto sector is undergoing a slowdown. So why did you choose to launch now?

When you enter the country you have to look at the overall perspective, the long-term potential. I think that remains intact, in my opinion. I think our country will have 6-8 per cent of GDP growth irrespective of externalities, because our economy is consumption-led. We have a strong consumer base, middle income level base, people are changing their habits, people from tier-3, tier-4 are going to buy more cars, though in tier-1 the ownership is probably going down.

But still, the overall number remains good. All kind of forecasts tells you that we should be the third largest market in the next four or five years, globally. Number one is China, number two is the US and number three, India, and that’s intact. I’ll bet on a bumper quarter in the fourth quarter calendar year this year.

Hector is coming in its diesel variant too and some players are talking about phasing out diesel vehicles, and it’s going to become expensive once BS-VI comes into play. So, what was the thought process behind this?

As of now, if you see the segment (mid-size SUV), this segment is very small, as I have been saying, but still, more than 80 per cent of the segment is diesel. So, people want diesel. In the high-end SUVs and high-end cars, people still like diesel, they want diesel. But, I would like to believe, even after BS-VI, the segment will be 40-50 per cent diesel, if not more. So, for that 40-50 per cent segment, you can’t ignore it.

So that’s where the diesel (car) is required and that’s what we are doing. But again, we are trying to provide alternatives to the consumer. So that’s why we have the 48 volt hybrid we are giving, which is the first time in the industry. Hopefully, these things will help us.

Hector is India’s first internet car. What all does it entail? How is it going to be a product differentiator and how is it going to disrupt the market?

So basically, this is this means you are always connected to the cloud, your car has a SIM card, you can do a lot of functionalities in the car whether it is voice recognition, real time traffic, real time weather, you are connected to the call centrer (and) in case of an emergency, help can come. If you want to know any services, you give a call to the call centrer…

Over the air, we can do lots of updates. Let’s say ...you change the music because of the change of flavour in that month, we can change the music from our workshop. So, lots of head unit related changes we can do from our from our factory- you don’t have to go to the plant. So lots of such things are possible. You can stream from Gaana, so Gaana is going to be our partner. So with the help of our ecosystem partners, we are trying to give a very safe and secure environment in which you can play with a car when you are not driving. So so there are do’s and don’ts- when you’re driving you can’t do certain things.

Will the subsequent three launches also be internet cars?

That’s the endeavour — that we should have this as (a) standard on our full range. It’s difficult for me to commit at this point of time, but that’s the endeavour.

What about the viability of hybrid cars in India, since the GST on hybrid cars is pretty high too?

There are all kinds of hybrids, and the 48 volt hybrid is a mild hybrid, we are not talking about PHEVs or plug in hybrids...the government probably can do better here and there can be more incentives. But at this point of time, I think we thought we’ll take the initiative on our own, and then try to be the first one in the country to give this alternative to consumer and because the the price of this is going to be less than the diesel car price, hopefully consumers should lap it up.

How would you price Hector?

We haven’t decided the price yet, we are going to finalise and disclose at the time of launch, it will be competitive — the price has to be competitive — and you will come to know at the time of launch (in June).

Is localisation something that the company is focussing on since you said that more than 300 changes were made to the Indian model of Hector?

That’s a huge part to reasonable pricing and also to ensure that serviceability of the car is good. So, we are starting at about 75 per cent weighted average localisation and and this will keep on increasing as you go forward because we will talk about even engineering centrer and more engineering to be done in India as we go forward. So yes, localisation is a very, very important part of our journey.

Published on May 15, 2019

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