MG leads "aggressive" Chinese expansion

Once a British-owned maker of small sports cars, MG is set to become a mainstream brand leading the most 'aggressive' assault yet by a Chinese automotive manufacturer on the global market.

MG (Morris Garages) is owned by China's biggest automotive player, SAIC Motor, which has hatched a five-year plan to establish MG brand globally with a full line-up of passenger vehicles and SUVs.

And Australia, where the Shanghai-based automotive giant will reclaim control of the brand from an independent distributor from January 1, is an important early foray in that plan.

SAIC Motor acting executive director of international business Yang Xiadong laid out the broad brush strokes of the plan to Australian media at the Dubai auto show overnight, where the MG brand's first SUV, the GS, was being launched.

"We have a very aggressive plan for globalisation in the next five years," he confirmed. "We will try to be very aggressive in terms of the footprint, manufacturing, design centre, investment and also the local marketing.

"Over the next five years we will have a full range product portfolio... basically we will cover all the passenger segments," he added.

While little known outside China, SAIC Motor has the capital to back up its plans. Owned by the federal government, it is China's biggest car manufacturer by sales and market capitalisation and the ninth biggest automotive group in the world, building 5.62 million cars in 2014. It is also ranks 60th on the Fortune Global 500 list.

SAIC has joint ventures with General Motors and Volkswagen in China, as well as developing and selling its own independent MG and Roewe (formerly Rover) passenger cars and Maxus commercial vehicles – sold in Australia with the LDV brand.

SAIC Motor took control of MG in 2007, when it merged with Nanjing Auto, which had bought the bankrupt British business in 2005. Roewe has been built from the remains of the bankrupt Rover business acquired by SAIC in 2005.

Roewe is pitched as a domestic brand, while MG has become the global expansion vehicle, retaining design and engineering facilities at its traditional Longbridge base in the UK as well as in Shanghai. It is also sold in small numbers in the UK via an independent distributor.

SAIC has recently built a factory in Thailand from where it plans to eventually source all global right-hand drive production. It also has a joint-venture to build a factory and supply park in Indonesia.

Meanwhile, the Maxus commercial vehicle van is also going global. Badged LDV in Australia, the brand is distributed by Ateco Automotive, an arrangement that is not expected to change.

But MG distribution will return to SAIC from Chinese-owned Longwell Motor, which launched the medium-sized MG6 in Australia in 2013, but has failed to progress plans to establish a national dealer network and add the MG3 mini to the line-up.

SAIC Motor Australia will offer both a facelifted MG6 and the MG3 in 2016 and add the 2.0-litre turbo-petrol GS in Q3. Pricing and warranty back-up is expected to be far more competitive than during Longwell's administration, and a dealer network will finally be established.

It will be the second brand after Great Wall Motors SUV brand Haval to establish a fully-owned subsidiary to handle distribution in Australia.

However, Yang declined to discuss Australia in any depth, preferring to focus on the bigger picture and the reasons for it.

"Although we are the biggest in China we do not think we are there yet compared to Toyota, Honda and so on," he said. "The China market, we don't view this only as the China market. We consider this part of the global market.

"If we want continued success with China we must become successful globally. So this is a well integrated market, instead of China and other regions.

"So if we are not successful in other regions we will not be successful in China."

He also made it clear MG would not return to its sports car roots as SAIC Motors tasked it with chasing a new and younger audience.

"Before the usual MG customer is usually focussing on the senior people," he said. "Now we want to redesign the brand to be more fashionable, more dynamic, more passionate."

He made it clear that the roll-out of new models would include advanced technologies such as autonomy, internet connectivity and new-gen powertrains as SAIC Motor developed those technologies. It already sells hybrids and EVs in China and has declared a plan to build 30 green vehicles in the next five years.