MG Motor firms up strategy to crack Indian market
29th Mar 2018 6:55 pm
Company MD Rajeev Chaba says establishing brand more crucial than volumes; to focus on SUVs, high localisation levels and customer experience.
MG Motor India is gearing up to make a foray into India with its first model – a Creta-rivaling mid-size SUV – in the first half of 2019, and work towards reconstructing its Halol plant, acquired from GM, is on in full steam. The carmaker, however, admits establishing itself in India will be a tough job. Performance of global automakers such as GM, Volkswagen, Renault-Nissan, Skoda, Fiat and Ford shows that gaining presence is not easy.
"I'm the first one to say, it's not an easy job. That's why we need to do things in a different way; everything from product selection, product features to product assurance, customer experience and post-sale experience has to be carried out in a more meaningful and compelling way," Rajeev Chaba, president and managing director, MG Motor India said. "There is no silver bullet in the auto industry. Our advantage is we that don't have any baggage," he added.
In an effort to better take on competition from established rivals such as Maruti Suzuki and Hyundai, MG aims to adopt an approach with strong emphasis on attractive prices, high localisation and a richer customer experience. The stress could be particularly more on customer
experience of the brand. "There’s a lot of scope and opportunity in that area in our country, be it sales, be it after-sales," Chaba told our sister publication Autocar Professional.
MG is targeting a premium positioning to establish its brand – much like fellow newcomer Kia – and Chaba confirmed the first SUV, to be launched in the first quarter of 2019, will be over four metres in length. The India-specific model is set to lock horns with the hugely popular Hyundai Creta. "We would have to introduce a sub-four-metre SUV at some point in time since participation in most of the segments is imperative to become a mainstream player. So I wouldn’t rule that out. But at this point in time we don’t have a plan," he added. After the SUV, the carmaker intends to introduce one new product every year.
Apart from a promising product, MG understands having an affordable price tag is crucial to attract more buyers, and is targeting a high level of localisation. It has pledged 90 percent of components to local suppliers and aims to achieve 80 percent localisation for its models from the start.
In terms of powertrains, SAIC lacks a small diesel engine in its portfolio but Chaba indicated that the company is open to collaborations. "A diesel engine is relevant in certain segments, especially on the high-end side. We have a large capacity diesel – SAIC has got a 2.0-litre diesel engine that’s BS-VI ready in Maxus (its CV brand). But if we need to outsource a (smaller capacity) diesel engine, we would not shy away from that and we would tap into the best source," he said. However, he expressed uncertainty about the long-term prospects of diesel in the country.
The India-bound MG SUV is likely to come with a Fiat-sourced 1.5-litre diesel engine and a 1.8-litre petrol with mild-hybrid tech. Although the share of diesels in India has reduced, they continue to account for a significant chunk of the demand, especially among SUVs.
MG Motor plans to invest over Rs 5,000 crores over 5-6 years and double capacity to 2,00,000 units with up to 80,000 units in the first phase at an initial investment of Rs 2,000 crores.
Electric vehicle strategy
Chaba confirmed MG Motor India will introduce an electric vehicle within five years of launching its first model in India. The brand will tap into the resources of its Chinese owner SAIC Motor, which has advanced electric vehicle capability and has a large portfolio of electric cars under its Roewe brand.
"I'm confident that we will definitely be at the forefront of electric vehicle technology in India and we are studying prospects of the same as we speak. We are also trying to test vehicles in the Indian road conditions," he said.