Amid pandemic and border tensions, MG Motor outshines its rivals in India

Mumbai: During a difficult year for business, MG Motor India, the local subsidiary of China’s largest automaker SAIC, emerged as the leader in the premium sports utility vehicle segment as some of the more-established rivals struggled.MG Motor’s Hector was one of every two C-segment SUVs sold in the country in 2020, bettering Mahindra XUV 500, Jeep Compass and Tata Harrier. Almost 26,000 units of the Hector were sold in 2020.Sales of the only Chinese carmaker in India were expected to take a hit due to adverse consumer sentiment after border tension between the two countries. However, the British heritage of the MG brand, the value-for-money offering and a long list of features ensured that its sales grew by 77% over 2019.“Indian consumers are paying attention to the whole value proposition rather than a particular country of association. The market has bounced back very well and the traction for our products is better than pre-Covid levels,” Rajeev Chaba, president of MG Motor India, told ET.“The Indian consumer has not fallen for jingoism and chooses a brand on its merit and relevance rather than mere provenance,” said Avik Chattopadhyay, cofounder of brand strategy firm Expereal.In 2021, the company plans to enter the mainstream mid-size SUV space that’s priced at Rs 10-15 lakh to challenge Hyundai’s Creta. It has lined up an investment of Rs 1,000 crore at its plant at Halol in Gujarat for this, Chaba said.MG Motor sold 28,162 cars in India in 2020, accounting for a 1.2% market share and outselling Volkswagen, Skoda, Nissan and FCA, which have been in the country for over a decade. Along with Tata Motors and Kia, it was the only carmaker to witness sales growth last year, the company’s first full year of operations after it began sales in the country in mid-2019.In 2021, the company expects its sales to increase 70% to about 50,000 cars in India, Chaba said. However, it may not be an easy ride, with competition from a new-generation Jeep Compass, Mahindra XUV 500 and a new seven-seater SUV from Hyundai based on the Creta platform.Moreover, the segment in which MG Motor operates may start stagnating due to competition from used luxury vehicles, according Chattopadhyay.“Therefore, MG Motor must play in the Rs 10-15 lakh price band soon enough to remain relevant and profitable in the Indian market,” he said.The Chinese company was expected to take a call on investing in a new plant this year, but with the Centre scrutinising all foreign direct investments from neighbouring countries, it is in a wait-and-watch mode. Deciding whether to invest in a new factory or rely on contract manufacturing and the company’s entry into the mainstream sub-Rs 10 lakh market is likely to be taken by MG Motor in the second half of 2021.“The jury is still out on further (capacity) expansion and sub-4-metre SUV. Hopefully, within 2021 we will take a call on that,” Chaba said.MG Motor is also the leader in the premium electric vehicle space, outselling Hyundai Kona by a big margin. The company is close to firming up a plan for an EV priced below its ZS EV – rivalling Tata Nexon EV, according to several people aware of the matter.
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