First fleet contracts mark ‘transformation year’ for MG

A batch of orders from the fleet sector is being hailed as a turning point for born-again MG.

After starting with a retail focus five years ago, the carmaker says its badge is starting to become recognised in the fleet market.

“I can’t talk about who we’re dealing with, but we have signed our first contracts,” said Guy Jones, sales and marketing director of MG. “This is our transformation year with fleets and the future is looking good.”

Registrations remain relatively small – MG registered 1,840 cars in the first nine months of 2014, equating to an overall market share of just 0.9%. 

However, that was a 574% increase on the same period last year and MG is pinning hopes of further progress on new leasing packages for business users.

Jones is confident that high-value offers will build fleet interest in the brand that is now part of SAIC, China’s biggest automotive group.

“We think a three-year/30,000-mile plan including maintenance on our top MG6 model for under £200 a month should have strong appeal and the cost is still under £250 if annual mileage reaches 30,000,” he told Fleet News.

MG Motor UK assembles the MG6 and MG3 hatchback models on part of the Longbridge home of the Austin Motor Co. This year 2,000 vehicles are due to leave the site.

Jones added: “It would have been good to reach 3,000 units, but we’ll still achieve four times the number built in 2013 and the fact that we’re now talking to fleets will be significant to our continued growth.

“Clearly, MG is still unable to match competitors who deal with some of the bigger operators needing either a full product range or fleet management support, but there are plenty of smaller operators who want good quality, reliable vehicles that meet their needs at attractive prices.

“All the legwork we’ve done is starting to pay off. Fleet is all about relationships and developing them takes time.”

Until recently, a 139g/km CO2 emissions figure prompted companies to steer clear of the MG6 but a reduction to
129g/km has lifted its appeal. 

“While it’s not class-leading, the new level is still a relatively competitive position for a model of its size with good performance,” said Jones.

“We’re working for a further reduction and our target is to hit the next tax band down and close the gap on the competition over the next two to three years.

“We now have national dealer coverage and will have 60 outlets by the end of the year. Further development will take place in 2016.”

Jones said in the past a lack of support meant the brand was not acceptable to fleets, but the infrastructure it now has means that it is primed for growth.

Awareness of MG should receive a further boost next year with the arrival of TS, a mid-size sports utility model and Jones said SAIC has confirmed the Icon, a smaller SUV, is also heading for Europe.

“We need only look at Nissan to see the benefits of products like these – they are very good for fleets and user-choosers,” he said. “In the meantime, keen pricing and high specification is winning interest in the MG3 from fleets with salary sacrifice programmes, but work is under way to further develop this car and the MG6.

“We need further powertrain development for companies that have low CO2 caps and, when we get there, our cars will still carry attractive pricing.”

Asked about the progress of MG, Jones said: “Up to this year, it’s been frustrating because most of our work has been hidden from view. People thought we were just carrying on from before, but we’ve had to renew every system and process as well as creating new vehicles on new platforms.

“Starting again from scratch takes longer than just developing previous products, but we control our own destiny and will be more profitable in time. We are operating on a tight balance – MG failed because it was not commercially viable; our business will be profitable.”