First fleet contracts mark ‘transformation year’ for MG 06/11/2014 in News Home

A batch of orders from the fleet sector is being hailed as a turning point for born-again MG.

After starting with a retail focus five years ago, the carmaker says its badge is starting to become recognised in the fleet market.

“I can’t talk about who we’re dealing with, but we have signed our first contracts,” said Guy Jones, sales and marketing director of MG. “This is our transformation year with fleets and the future is looking good.”

Registrations remain relatively small – MG registered 1,840 cars in the first nine months of 2014, equating to an overall market share of just 0.9%. 

However, that was a 574% increase on the same period last year and MG is pinning hopes of further progress on new leasing packages for business users.

Jones is confident that high-value offers will build fleet interest in the brand that is now part of SAIC, China’s biggest automotive group.

“We think a three-year/30,000-mile plan including maintenance on our top MG6 model for under £200 a month should have strong appeal and the cost is still under £250 if annual mileage reaches 30,000,” he told Fleet News.

MG Motor UK assembles the MG6 and MG3 hatchback models on part of the Longbridge home of the Austin Motor Co. This year 2,000 vehicles are due to leave the site.

Jones added: “It would have been good to reach 3,000 units, but we’ll still achieve four times the number built in 2013 and the fact that we’re now talking to fleets will be significant to our continued growth.

“Clearly, MG is still unable to match competitors who deal with some of the bigger operators needing either a full product range or fleet management support, but there are plenty of smaller operators who want good quality, reliable vehicles that meet their needs at attractive prices.

“All the legwork we’ve done is starting to pay off. Fleet is all about relationships and developing them takes time.”

Until recently, a 139g/km CO2 emissions figure prompted companies to steer clear of the MG6 but a reduction to
129g/km has lifted its appeal. 

“While it’s not class-leading, the new level is still a relatively competitive position for a model of its size with good performance,” said Jones.

“We’re working for a further reduction and our target is to hit the next [benefit-in-kind] tax band down and close the gap on the competition over the next two to three years.

“We now have national dealer coverage and will have 60 outlets by the end of the year. Further development will take place in 2016.”

Jones said in the past a lack of support meant the brand was not acceptable to fleets, but the infrastructure it now has means that it is primed for growth.

Awareness of MG should receive a further boost next year with the arrival of TS, a mid-size sports utility model and Jones said SAIC has confirmed the Icon, a smaller SUV, is also heading for Europe.

“We need only look at Nissan to see the benefits of products like these – they are very good for fleets and user-choosers,” he said. “In the meantime, keen pricing and high specification is winning interest in the MG3 from fleets with salary sacrifice programmes, but work is under way to further develop this car and the MG6.

“We need further powertrain development for companies that have low CO2 caps and, when we get there, our cars will still carry attractive pricing.”

Asked about the progress of MG, Jones said: “Up to this year, it’s been frustrating because most of our work has been hidden from view. People thought we were just carrying on from before, but we’ve had to renew every system and process as well as creating new vehicles on new platforms.

“Starting again from scratch takes longer than just developing previous products, but we control our own destiny and will be more profitable in time. We are operating on a tight balance – MG failed because it was not commercially viable; our business will be profitable.” 

First drive review: MG6 1.9D SE 13/08/2013

Reviewed by Fleet News

FN Verdict :

BIK List Price £18,020

BIK Percentage 21%

CO2   139g/km

Combined   MPG54

Review

It’s been seven years since the failing MG Rover was split into Chinese ownership and almost five years since the MG brand returned to the UK with the back-from-the-dead MG TF roadster.

But it probably wasn’t until 2013 that the brand had any chance of appearing on fleet radars – with the exception of the short-cycle rental market.

The MG6 (in hatchback GT or Magnette saloon) body style was launched in March 2011 as the brand’s first all-new model under Chinese ownership, but has been offered with a diesel engine only since January of this year.

The 150bhp 1.9-litre is the first diesel engine from Shanghai Automotive, although it was developed and engineered in the UK, and comes with common-rail technology, a variable rate turbocharger and idling stop-start.

There’s 258lb-ft of torque available at 1,800rpm and the diesel is a responsive performer, if a little noisy.

The steering, although direct, is rather light, while the MG6 manages to feel sharp enough on the road without too firm a ride.

Standard equipment on this mid-grade SE model, which has a P11D value of £18,020, includes satellite navigation, four electric windows, alloy wheels and cruise control.

It’s roomy and comfortable inside, feeling large next to the C-sector cars with which it competes on price, although some of the materials don’t feel up to the level of quality offered in rivals.

Less impressive is its CO2 emissions of 139g/km – high for a modern 150bhp diesel – which compares poorly with the Skoda Octavia hatchback 2.0 TDI at 106g/km even if it is £2,000 more expensive.

The MG6 also has a four-star Euro NCAP rating, lower than most new cars in this class.

It’s possible to see the attraction of the MG6, a car that is competent in some areas. But only for an MG enthusiast who wants to keep the marque alive in the UK under its Chinese owners or where a trustworthy dealer with the franchise is located near a small business and is capable of providing the support for business vehicles.

But with fewer than 30 dealers for sales, and a little more than 40 outlets for servicing and repair, it is perhaps too early for a business to add the MG brand to its choice lists and expect it to have the appeal of established fleet players.

CO2 emissions

For a modern diesel hatchback, the 139g/km rating is far too high for the MG6 to be taken seriously, despite the ample 150bhp power output.

Fuel costs

A tad over 50mpg on the combined cycle seems unambitious for the MG6 diesel, when similarly powered rivals can achieve 60mpg and more.

Residual values

The MG6's relatively low front-end price does a little to offset the deficit in residuals it faces compared with rivals. A small dealer network and relative lack of awareness don't help.

Running costs

The MG56 remains a relatively expensive car for a fleet to run, despite its budget car pricing. Interestingly the forthcoming MG3 small car looks a lot more competitive on list price than the larger MG6.

Driver appeal

There may be some enthusiasm for the MG6 brand, and it gains visibility from its participation in the British Touring Car Championship, but most drivers would be happier in a rival product.

FN Verdict

Although introducing a diesel engine was a step in the right direction for MG, the brand has a great deal of work to do before fleets will take the brand and its products seriously.

Simon Harris