Why MG Motor is taking a different road in the India market

Madhavan N | Updated on November 20, 2019

The carmaker has made a good start here with the MG Hector, and is going about establishing itself in a measured manner whether it is in setting up a dealer network or in gearing up for the EV opportunity

MG Motor, the latest car brand to enter India, is trying to position itself as an innovation and technology leader in a bid to crack the market, which is dominated by Maruti Suzuki and Hyundai, who together account of 70 per cent of all cars sold.

MG Hector, the first car of the iconic British brand, now owned by SAIC (formerly Shanghai Auto Industrial Corporation), was India’s first connected SUV.

It offered remote vehicle control, voice assistant and other features and has been reasonably well received by customers. Within weeks of its launch the car has run up 33,000 bookings. It has so far delivered 10,000 units.

The company has already announced its second product, MG ZS EV, an electric vehicle. The car, powered by a 44KwH battery with a range of 335 km, will be revealed in December and sales will begin in January next year.

MG Motor's MG ZS EV undergoes a 'wade' test.  The fully electric vehicle, which the company will launch in India in January, was recently subjected to tests in Shanghai.

Calibrated moves

Rajiv Chaba, President & MD, MG Motor India, is aware that India is not yet ready for an electric car. “We want to differentiate ourselves as a technology leader,” he told BusinessLine. By technology leadership he is not restricting himself to the product. “MG Motor India is working (with partners) to set up charging infrastructure and work on battery end-of-life strategy,” he added. Such a positioning, Chaba hopes, will make MG a force to reckon with in India and lay the foundation for its long-term plans, which include a possible entry into the small-car market.

For now MG Motor is taking calibrated steps. Its production ramp-up has been measured. “We are getting our basics right,” Chaba said, adding “Our emphasis has been on recruiting the right people, selecting the right dealers and creating the right brand image.” The company has just started its second shift to meet the demand for the MG Hector.

Dealer support

On the dealership front, it wants to avoid the mistakes other carmakers made. “We tell our dealers you take care of customers, we will take care of your profitability,” says Gaurav Gupta, Chief Commercial Officer, MG Motor India.

The company is appointing just one dealer in a city to ensure they profitability for the dealer. Its retail footprint involves five different models, keeping in mind the maximum reach for customers and profitability for dealers.

MG’s parent SAIC, the largest carmaker in China with sales of over 7 million units in 2018, has committed to invest ₹5,000 crore and launch five new products by 2022. It acquired General Motors’ Halol car plant in 2017 for ₹2,000 crore.

Battery push

SAIC’s $1.5 billion investment in a state-of-the-art battery manufacturing facility, the first by a car manufacturer, at Liyang in Jiangsu province, will help MG Hector when it comes to powering the MG ZS EV. “Having our own facility will help us to customise the battery for our models better and give us a pricing advantage,” Chaba added.

SAIC’s focus on India is not surprising. After all, India is a growing market that is critical for SAIC to establish itself as a global player. A reputation for being a technology leader will help the Chinese company make a mark in the Indian market, which has proved to be the graveyard for an MNC automaker.

(The writer was  recently in Shanghai at the invitation of MG Motor India)

Published on November 20, 2019

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