MG’s Bold Success in Europe Will Force It to Make a Major Decision

The surge in MG sales across Europe is prompting the Chinese manufacturer to consider building a factory.

The Trojan Horse scenario has repeated itself: it’s impossible not to succumb to 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.

Over the course of a year, the volume of cars sold in the first halves of 2022 and 2023 has increased by a factor of 2.3! From 42,000 units sold between January and June 2022, MG has risen to 99,800 in the same period in 2023. In a full year 2023, the total will exceed 200,000 cars, as growth will be even stronger in the second half.

Beyond a certain threshold, it is no longer worthwhile to produce such large and heavy objects in Asia and then ship them by boat. Maritime freight is very expensive and becomes a limiting factor, as there will not be enough ships on the seas to meet demand.

MG Europe has confessed to seriously considering establishing a factory in Europe, especially as the Old Continent prepares a strong response against electric cars produced far away. France, starting in 2024, will condition the eco-friendly bonus for electric cars on an environmental score (place of production, pollution related to transportation, etc.) that must be virtuous. This protectionism, which doesn’t carry that name explicitly, aims to exclude from the game cars produced across the Atlantic or in China.

To circumvent this problem, which is bound to become widespread across Europe once France shows the way, MG and other manufacturers will have no choice but to create jobs on the Old Continent. Tesla is also considering expanding, notably in France.

Since MG will always aim to offer very competitive prices, this factory will most likely be set up in Eastern European countries where labor is the cheapest. Be aware, however, 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 will be maintained in Great Britain, as labor costs and administrative complications related to Brexit are significant deterrents for foreign investors nowadays.

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