An uphill road, but a strong start

An uphill road, but a strong start

MG's local to-do list includes burnishing the brand image and cracking the top five in sales. By Piyachart Maikaew

Pongsak Lertrudeewattanawong, vice president for MG Sales Thailand Co, SAIC Motor-CP's subsidiary.
Pongsak Lertrudeewattanawong, vice president for MG Sales Thailand Co, SAIC Motor-CP's subsidiary.

Amid the fierce competition of Thailand's car market, the going can get tough for any brand seeking to enter a competitive field dominated by Japanese makes.

But the Chinese-owned MG brand has yet to feel the pinch after commencing production of finished cars and local distribution in mid-2014.

The MG production plant, relocated from Rayong to Chon Buri, is positioned as the strategic hub for Shanghai-based SAIC Motor Corporation to make right-hand-drive cars for Southeast Asian and Oceanian markets.

SAIC has teamed up with Thai conglomerate CP Group to form a local joint venture, SAIC Motor-CP, to handle all business dealings in Thailand.

MG's reputation in Thailand is as a Chinese brand, not British, and the latter is the association SAIC Motor-CP wants to promote. The brand ranked ninth with 13,851 cars sold from January to July this year, up 106% year-on-year.

The sales achievement instilled confidence to keep moving with long-term investment in the country, says Pongsak Lertrudeewattanawong, vice-president for MG Sales Thailand Co, a SAIC Motor-CP subsidiary.

"We are confident of our sales target of 30,000 units across all Thai-made vehicles in 2018, and we are committing to climbing into the top five car brands in the long run," Mr Pongsak said.

EV application

Mr Pongsak said SAIC Motor-CP submitted the application for plug-in hybrid EV privileges to the Board of Investment (BoI), while the battery EV scheme is still under considering. The company has until the end of the year to decide on the latter.

For plug-in hybrid EVs, SAIC Motor-CP is the fourth carmaker to show intentions to join the scheme, after Mercedes-Benz, BMW and Mitsubishi. Only the two German firms have so far been granted BoI privileges.

"SAIC Motor, as the parent firm, has many technologies related to the EV families in every brand," Mr Pongsak said.

The Chinese state-owned company has three brands present in the market: MG, Maxus and Roewe. The MG and Maxus brands belonged to British companies over a decade ago.

"All three brands are available in plug-in hybrid and battery EVs; for example, Roewe E50, MG E6 and Maxus EV80, sold mainly in China," Mr Pongsak said.

But he said the high manufacturing cost to assemble the EVs is a concern, as the result could be higher retail prices in the local market.

Once SAIC Motor-CP is granted privileged by the BoI, the company will evaluate once again all aspects -- cost, pricing and state of the market -- to offer the most affordable price possible to Thai motorists.

Eco-car patience

SAIC Motor-CP was also an applicant for the BoI's eco-car scheme in 2014. It was granted privileges in November 2014 to make 110,000 eco-cars a year worth 7.6 billion baht.

Up to now, there has been no new movement from SAIC Motor-CP on the eco-car front. The BoI is concerned that the carmaker will withdraw from the project, following the example of two US peers, General Motors and Ford.

But the eco-car time frame sets a deadline to start production by the end of 2019.

Mr Pongsak said the company is still studying the feasibility of eco-cars, so it has yet to select which models will come in eco-car variants. In addition, SAIC Motor lacks small cars to match the Thai market.

"But we have seen that the eco-car segment has great potential now, making up a majority segment share in the passenger car market," Mr Pongsak said. "The sport utility vehicle (SUV) segment has smaller volume than eco-cars, but MG is good at this with two competitive models."

The overall eco-car segment represented 44% of passenger cars with 156,239 units sold in 2017, but the segment's share rose to 55% in the first half with 102,537 units sold.

Mr Pongsak said the eco-car requirements impose strict conditions for each carmaker to comply with, such as high Euro 5 standards, low CO2 emissions and light weight.

Studying pickups

Mr Pongsak said SAIC Motor-CP is keen to develop pickup trucks, as the parent firm has the Maxus T60 available in the China market.

The Maxus plays the role of a commercial vehicle for SAIC Motor, with some vans imported from China available locally.

Although the pickup truck segment in Thailand has two major players -- Isuzu and Toyota -- SAIC Motor-CP believes that there is more room for new players and that the Chinese reputation will not be an obstacle.

"Ford Ranger is an interesting case study for us, as this model climbed to third place in the pickup truck segment within a couple of years," Mr Pongsak said. "So SAIC Motor-CP must spend a lot of time doing our homework and finding the right pickup truck and the related technology to match with Thai motorists' requirements."

He said the company is confident that Thai buyers are opening up to car brands and that a market window for the Maxus brand in the pickup segment will appear.

But Mr Pongsak said that in order to improve the company's image in car distribution, there are two keys for SAIC Motor-CP: competitive models and sales and service network.

The MG brand has two dominant cars: the MG3 hatchback and the MG ZS small SUV.

MG continually strives to improve after-sale services, Mr Pongsak said, adding that plans call for expanding the current base of 83 showrooms and service centres to 120.

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