MG Must Establish Itself in Europe to Preserve Its Prices

Europe has given a reception that even it did not expect to the British manufacturer now under Chinese ownership. It is time for MG to return the courtesy.

MG’s approach is simple and foolproof. Impossible to resist an electric car with such a revolutionary price/performance ratio. The plan has worked, probably even beyond all expectations, because today MG faces a serious dilemma: meeting its production and delivery deadlines.

In just one year, the volume of cars sold has tripled! Beyond a certain threshold, it is no longer profitable to produce such large and heavy objects in Asia and then ship them by boat. Maritime freight is very expensive and becomes a bottleneck, as there will not be enough ships on the seas to meet demand.

Furthermore, recent decisions such as the adjusted Eco Bonus in France have changed the game. A form of protectionism that doesn’t carry that name but seeks to exclude cars produced across the Atlantic or in China. Yes, it costs more to produce in Europe than in China, but the benefit/risk ratio has strongly shifted towards prioritizing local production. And what about ecological logic! It’s good to favor recycled and recyclable materials, but it is even better to reduce fossil fuel consumption.

MG Europe has thus admitted that it is seriously considering establishing a factory in Europe. Because MG will always aim to offer very competitive prices, this factory will most likely be located in Eastern European countries where labor is the cheapest. Beware of issues related to sourcing spare parts and raw materials, which require quick access to the sea.

Finally, although MG is historically a British company, it seems unlikely that a position in Great Britain will be retained, as workforce and administrative complications related to Brexit are now prohibitive for foreign investors.

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