MG's fleet focus should pay off for dealers in the medium term

Like Kia and Hyundai did during the 2010s, a focus on becoming much more fleet-friendly has powered Chinese-owned MG Motor to ramp up its UK new car sales and win 4% of the overall market in 2023.

Like the South Korean brands saw their share-building opportunity during scrappage, MG spotted its chance as more corporate customers and company car drivers eyed up affordable petrol and electric vehicles, which it could ship across from its Chinese parent SAIC in volume.

It has also become part of the portfolio of an increasing number of AM100 dealer groups, most of which have teams experienced in both retail and corporate sales and aftersales.

As the MG brand celebrates its 100th anniversary in 2024 it is on track to rank among the 10 largest car makers, by sales volume, at the end of this year.

Unlike Kia and Hyundai, MG has no aspiration to become more upmarket, according to its fleet sales boss Geraint Isaac. He joined MG in 2019 after eight years with Hyundai during that brand's own product offensive.

He confirms MG understands its best position in the market. “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 lower profit channels are playing a large part in getting MGs into the hands of more drivers. In 2023 Motability accounted for 28% of its new car registrations, and rental another 18%. True fleet represented 21% of sales, and retail - considered to be the most profitable - was 29%.

Buyback rental deals and Motability will ensure a good supply of quality used cars for the MG dealer network in the short- and medium-term future, nevertheless, which is important for retailer profitability. 

Isaac says: "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 dealers are being asked to raise their game and ensure that customers, many of which will be new to the brand, get a positive aftersales experience. 

In 2023 the MG Fleet Charter was introduced, 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 for fleet customers 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 and leasing companies with greater transparency.

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.”

Within a decade MG has moved from being a franchise for owner drivers to one very much appealing to regional and national AM100 dealer groups. Its franchisees now range from Arnold Clark Automobiles to Vospers.

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, winning Used EV of the Year at the 2024 AM Awards and 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.”