MG won’t abandon value proposition as it becomes a top-10 manufacturer

MG’s growth has been nothing short of remarkable. In the last seven years the brand has accelerated its sales from less than 10,000 per year to almost 90,000.

While the marque celebrates its 100th anniversary, in 2024, the MG Motor UK that we know today bears very little resemblance to the business that came before.

Under Chinese giant SAIC’s ownership, MG got off to a slow start, initially. Its tactic to offer low priced models, in a market that was moving upmarket, has very clearly paid off.

The brand now has a market share of more than 4% and is on track to rank among the 10 largest car makers, by sales volume, at the end of this year.

MG’s UK fleet sales operation is led by Geraint Isaac. He’s been in the head of fleet sales role since 2021, having stepped up from national fleet sales manager. Isaac brings previous experience from Hyundai and Vauxhall.

Having collected the trophy for Most Improved Manufacturer at the 2024 Fleet News Awards, he confirms MG will remain a budget-friendly brand.

“We want to still be known as a value brand, but with very good quality vehicles. Are we looking to go premium? No, we're not. The problem is, if you start following that road, everyone's going to be a premium brand.”

The fleet market has played an important role in MG’s success. In 2023, 29% of the brand’s registrations came from the private retail sector. Registration figures for the first half of 2024 show that’s fallen to 23%.

True fleet accounts for 21% of sales, while Motability makes up the bulk of business at 28%. A further 18% of new MG registrations this year can be attributed to the rental sector.

Isaac says the brand’s rental sales are all on a buyback basis, providing greater control over residuals.

He explains: “We can control the cars going out and coming back and then we sell them back into our dealer network, which obviously feeds the network with a used car. We're still growing our network, and as we're taking on new partners that helps because there's a steady supply of used cars that they can put on their forecourts and sell.”

MG’s exponential growth is coming to a close this year, however. Having boosted sales by 59% between 2022 and 2023, a more modest jump of 3.3% is expected at the end of 2024.

With annual sales now ahead of established industry heavyweights like Skoda, Peugeot and Volvo, the pressure is on MG to deliver a top-level service to fleets.

Isaac says: “We’re now a top-level manufacturer and that comes with expectations from customers. They expect us to behave in it in a certain way and to provide a certain level of service. They expect these things because we're up there now. So, we have to up our game accordingly to be able to maintain that.”

Last year, he introduced the MG Fleet Charter which focuses on response times and service levels to fleet customers. Included in this is a National Fleet Labour rate and MOT charge.

In addition to this, MG extended the initial loan car provision to 96 hours from point of recovery into a MG Dealership. Isaac says this not only provides onward mobility, but also ensures MG’s dealers can assess and repair faults in a timely manner.

Menu pricing was also introduced across the entire MG range, to provide fleets with greater transparency. It also assists fleets and leasing partners with their SMR budgeting.

Isaac says MG has forged some strong relationships with “major blue-chip organisations" but admits there is more work to be done if the brand is to maximise its true fleet potential.

He explains: “You can never rest on your laurels. I'm happy with where we are but there's still more work to do, especially with the leasing partners.

“We've grown the business year-on-year and we're really delighted with that, but we could still be doing a lot more. One thing I challenge my team on is working more closely with leasing partners and their sales managers - who are obviously the account managers for the end user customers.”

While MG’s product line-up is one of the youngest, it’s already part-way through a range overhaul.

The MG 3 supermini launched earlier this year, with a new hybrid powertrain. The brand has also just welcomed a fresh HS.

A new ZS is just around the corner, too, while the MG 5 is due a replacement in the next 12 months.

Looking further ahead, MG will strengthen its electric car line-up with the addition of a mid-size crossover.

All of these new models sit beneath the brand’s recently launched flagship. Marking a return to the sports car segment where MG gained popularity, the Cyberster is a unique proposition. It’s the first electric convertible sports car to go on sale in the UK.

While the Cyberster’s existence is at odds with Isaac’s claim that MG won’t abandon its core market segments and go upmarket, he states that the low-volume model will draw in more customers to the brand.

“Cyberster is a halo product for us and I think it’s a product that will show the buyers what MG is actually capable of through the technology and the development that has gone into that car.

“It's a premium vehicle, but we still want to be classed as a mainstream brand.”

The focus isn’t entirely on electric models, though. While MG enjoyed a strong year for EV sales in 2023, this year has proved more challenging. The root cause is a reduction in demand in the private buyer market for EVs.

Fleet customers account for two thirds of all MG’s EV sales, but this year to date only a quarter of all the cars it has sold have been EVs. That’s enough to get it past the 22% ZEV mandate target, but is quite a drop from the 37% achieved last year.

Its best-selling EV, the MG 4, remains a stand-out model in its segment. It was named EV Breakthrough of the Year, at the 2023 Fleet News Awards, for its combination of range, practicality and low costs.

The car continues to be MG’s best-performing model in true fleet, where it often appears on choice lists as the most accessible EV.

Isaac also expects an uplift in fleet demand for the new HS plug-in hybrid, which comes with a larger battery that gives a 75-mile electric range.

He says: “The BiK on that will be 5%, which is great. For those who are still not sure about adopting a fully electric car but want the low BiK, there's an option there.”