- Source: SAIC Motors

MG Has The Potential To Be The Future Of Automotive

It's hard not to marvel at MG's stunning resilience in automotive. Let's be honest over their long lifetime they have managed to withstand and, in some instances, flourish in what was otherwise considered dead and barren markets. They've changed hands over and over again but have never died unalike many of its historic and in some instances much more significant competitors. So where is MG at today? Where do they stand and what does the future hold?

Well I mean they're essentially a UK property under communist rule for the moment time being. But whilst most might see this as a worry, much alike to the way that the Australian and American Governments see Huawei as a threat, I've taken a much more pragmatic approach to the whole thing. In fact, I believe MG, and SAIC motors as a result, will become a bit of a success story in the long term and may even start to eat up brands we've known to be a part of the industry stable. Brands such as Toyota and Hyundai. They have a long way to go, but they also have a road map. And it's a very clear and concise road map that consists of a couple of key points that play to both Chinese and British strengths.

The Internet Of Things

It's a term that's been thrown around a fair bit in the past ten or so years. No-one, in Australia anyway, actually knows what it means. The definition has been narrowed a bit more recently and has been defined much better. Most consider "the internet of things" to be the same as the "smart home". Which in a way is true, but also not really. The internet of things is a term used to describe the integration of the internet in our day to day lives in a way that is as unobtrusive as possible.

MG has a much bigger plan for the internet of things.

At the moment this is being done through applications such as the smart watch or the smart home. However MG has a much bigger plan for the internet of things. They plan to bring out the worlds first truly internet connected car. Whilst I don't literally know what this means I tend to get excited about it. I mean a decade or so ago when someone said they were integrating the internet into your fridge most thought it was so your 4 year old child can watch funny cat videos whilst they get a glass of milk. The reality of what that first smart fridge became is something that has influenced many lives. A fridge that can detect when you are running low on a certain product and automatically order it for you from the local supermarket. They also control temperatures in different parts of the fridge to keep food at an optimal level of freshness. LG have even been working on a fridge which will tell you when a certain piece of food has passed its use by, or safe to eat, date.

So when I come back to MG, I think there's a lot in this space that could be done. Like refining a GPS system so that it can understand or detect where you want to go. Or giving a much more perfect and accurate fuel level read out. It could also encompass things like automatically heating or cooling the car without human intervention or allowing the car to self lubricate and keep engine conditions as optimal as possible for the preservation of parts. They're all just suggestions but they are more or less likely to become stable features in an MG vehicle once MG have figured out what sort of gold mine they're sitting on.

An Emotional Evolution

With each minute that ticks by we get closer to the launch of MG's first all electric sports car. And in reality it will actually be the first all electric sports car on earth as well. With many hyper car entrants and SUV entrants, no other manufacturer has actually targeted the cheaper sports car market. MG's quoted 0-100km time on that car will be 2.9 seconds, which is blistering for a car they're planning to sell well under $70,000AUD.

Source: SAIC Motors

But it's not just the E-motion which they're working on in the all-electric space. They're also planning to bring out their new GS in an all electric model as well. Now I'm presuming at this stage you're considering skipping straight to the comments section to make some unbelievably arrogant quip about how it's range should be better than the aspirated MG from 1964. So I'm going to address that point now and shut you all up. The range on these vehicles are quoted to be well over 500km. Not just that but as any engineer or mechanic would know the maintenance on an electric vehicle is a hell of a lot easier and better than that of an aspirated vehicle.

In fact if MG does come through with it's plans to launch a car that is fully connected to the internet it wouldn't surprise me in the E-motion and the EGS both come out with that same connectivity to allow for even less maintenance work on a year to year basis.

SUV Silly Season

What's most promising about MG in the future though is they're listening to what their market actually wants. They're researching affordable electric vehicles, they're specifying the current range vehicles with things like Apple Carplay and leather at no cost and they're building SUVs.

That last point is a big one, because they aren't just building any SUVs. They're building big, efficient, good looking SUVs. Cars that look like genuine market competitors as opposed to the other Chinese products in that segment. Those products are stripped out. The MG is specified up. Whilst you wouldn't necessarily take it off-road, there's no reason the car wouldn't provide relief to a young family who required 7 seats but didn't want to break the budget.

Source: SAIC Motors

They have a slather of SUVs on their release slate as well. It's not just one or two. MG are looking at five models including current model replacements over the coming couple of years. The amount of growth they're looking to build to support these huge releases is the same level that for example Honda has achieved in 15 years. That's ambitious, but that's not to say it's not doable. I mean Honda didn't have the backing of a foreign government and didn't open multiple tens of dealerships in Australia over the course of 12 months.

MG May Solve The Affordability Issue

Not only is their product costing less to import, but the way they've structured the business is actually making them a lot of money.

It's not just an issue in Australia either. It's an issue everywhere. It's one that many finance sectors have been struggling with. Setting an expectation of balance between affordability and finance. But MG doesn't seem to be having the same issue other manufacturers are having in Australia with affordability. Not only is their product costing less to import, but the way they've structured the business (which in a world first for automotive is prioritising volume over recommended retail price) is actually making them a lot of money.

I was actually really surprised by just how much money they were both saving and making as a result of simple business structure tweaks which long time will be extremely sustainable. It's not just good for MG either. It's going to solve all sorts of issues in Australia to do with unemployment and commuting.

Finance wise it solves problems with resale pricing as well. This is because of the low price point to start with. Whilst the car will not depreciate at any higher or lower rate then any other comparable car, it's difficult to argue that overall most will loose much less money in an MG over a 5 year period than in a comparable Volkswagen or Honda. Because it's simply not true. The percentiles are the same, but the values are different. It's why most fleet companies are flocking to MG. They're realising that profits can be much higher with MG and businesses will loose nowhere near as much money in depreciation.

What Does It All Mean?

Well in the grand scheme of market competitiveness it's only good news really. If MG are successful in all future endeavors than we'll see a general price drop in all vehicles that falls in line with competition theory. We'll also see the introduction of an affordable all electric sports car and SUV which should force many competing products into the market. I would say that MG will also be manufacturing cheaper charging points than both the BMW i and Tesla competitors and as a result those products will need to adjust pricing so that they can stay competitive in the electric automotive market.

And if all of that doesn't happen? Well we're left with MG, an affordable, future-centric car manufacturer who is China's first true entrant into the automotive market. And there isn't a thing in the world that could be wrong with that.

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