SAIC Motor usually saves the thunder for when it is on home soil with the biennial Shanghai Auto Show. However 2016 saw a particularly strong year with new models. First at Beijing it unveiled the Roewe RX5, billed as the first Internet car thanks to the YunOS developed in conjunction with Alibaba. Then at Guangzhou it unveiled no fewer than three models: the MG ZS, Roewe i6, and Maxus T60. One has to wonder what it has in store for Shanghai in April.
Guangzhou also highlighted why lumbering state-owned monolith SAIC is still struggling against the nimbler new breed of privately-owned Chinese manufacturers spearheaded by Geely. The MG and Roewe cars are of considerable interest to the British market due to the MG Rover connection. Maxus is also noteworthy as it’s built from the remains of former UK commercial vehicle manufacturer LDV. SAIC however had no English language press releases available and was unable to offer anyone to speak to the international media. Geely for instance always has English press releases and has a helpful Global PR department.
For the Chinese market SAIC has two car brands MG and Roewe. The problem is there is no real difference between them, as both are mass market brands. Before Chinese ownership MG was always seen as sporty. Even when MG and Rover badges appeared on essentially the same cars, as with the Rover 75/MG ZT, the MG version was modified and targeted as a more performance orientated model. Further muddying the waters it seems that Maxus may enter the car market. Already the G10 MPV arguably is more car than commercial vehicle but at the Beijing Auto Show the D90 SUV concept was shown.
Roewe in China has always outsold MG. Back in 2010 sales of Roewe were four times those of MG and in many years it’s at least double. However, the performance of both brands fluctuates wildly, with the best market share ever achieved at just under 1 percent during 2012 and 2013 by Roewe. The fluctuation is largely caused by new models which see high sales a few months after launch and then rapidly fall off. Sales figures up to the end of November show that Roewe is on course for record sales in 2016 but these are largely off the back of the new RX5 SUV which in November alone achieved 21,344 – a record for any SAIC model.
The fluctuation in sales is partly because of concentrating on new models at the expense of existing ones. So far the Roewe 350 has been SAIC’s bestselling model (total cumulative sales). At launch it came with a telematics system, something unavailable on the larger more expensive 550. Usually a manufacturer will have the best systems on the larger more expensive models and then it will work its way down the range. The ZS will have a system similar to the YunOS in the RX5. However, the larger GS which received a facelift in December keeps the InkaNET-based system rather than the better tech of the ZS. The ZS with its bold new grille appears to usher in new design language for MG but the GS’s facelift seems to have been lost in translation and does not reflect the ZS.
MG is generally said to have stood for Morris Garages (although there is a debate over this) but under Chinese ownership first became Modern Gentleman and now as seen at Guangzhou with the launch of the ZS – My Glamour. SAIC has so far failed to position the brand values of MG and Roewe so creating a problem in the Chinese market as well as for sales overseas.
SAIC has two clear competitive advantages. Firstly there is its telematics system and secondly plug-in hybrids neither of which has been offered with MG in the UK. InkaNET works in a similar way to GM’s OnStar sending diagnostic information about the car and providing help with navigation and in emergency via a call center. YunOS builds on this and creates a cloud-based Internet ecosystem for the car based on Alibaba’s platform. Due to the largely China-based nature of things like Alipay this system is probably not possible in Europe yet. However, GM has launched OnStar in Europe and with few other brands currently offering such a system MG could potentially use InkaNET to differentiate itself in the crowded UK market.
Mitsubishi, itself a brand struggling for relevance, has had considerable success in the UK with the Outlander PHEV. From launch in May 2014 until October 2016 sales topped 25,000 and accounted for around half of all registered plug-in hybrids in the UK. SAIC, thanks to government incentives in China, has had a hit with its 550 PHEV. While the technology may not be world class it obviously works and offering such a model in the UK where currently there is a limited choice of competing models makes sense – at the end of 2015 there were only 13 PHEV models available. A sedan version of the MG 6 called the Magnette was offered for a time in the UK and as it is essentially the same car as the 550 would provide a suitable platform.
Assuming the i6 does form the base of an MG 6 replacement – likely to be called the ZT – then the ZS and i6 show that with the right guidance and a bit of imagination the brand can be made a success yet. Both cars seem to show an upgrade in quality, design and promising new drivetrains. The challenge though is to create some sort of brand value and not to forget the existing models in the process. An upgrade of the 3 using the new three cylinder 1.0-liter unit would seem a good starting point. Creating a more international image for MG should also help with sales of the brand in China rather than it being seen as just another Chinese brand.