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Slowdown? What slowdown? How MG Motors has managed to buck the auto downturn

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Slowdown? What slowdown? How MG Motors has managed to buck the auto downturn


It’s not all gloom and doom in the automobile sector. MG Motor has presented a rare bright spot in the downturn with a stellar debut in India.

A car means more than just a set of wheels to most people. It ranks as a big purchase, second only to buying a home. Unless of course you also buy yachts and planes.

But the enthusiasm for buying cars in India has waned sharply in the past year. Official data points to a clear and present slowdown.
July data from the Society of Indian Automobile Manufacturers (SIAM) shows passenger car sales fell 36 percent from a year ago. Commercial vehicle sales were down 26 percent and those of two-wheelers dropped 17 percent. Data for August does little to inspire confidence.
But it’s not all gloom and doom in the automobile sector. MG Motor has presented a rare bright spot in the downturn with a stellar debut in India.
Splendid Debut In India
The British-origin company, owned by Chinese major SAIC, began its India innings with the SUV Hector. The vehicle packs a bagful of innovations, especially a host of connected features such as voice assisted control with natural language understanding, an embedded ‘Gaana’ premium account and a health status check, among others. The vehicle also has a ‘Find My Car’ feature as well as geo-fencing that allows a user to set a radius on the car’s app and get alerts in case the vehicle breaches it.
A competitive price tag has helped. Prices for the Hector start at Rs 12.18 lakh (ex-showroom) and top out at Rs 16.88 lakh.
Customers came out of hiding for the SUV.
MG sold 1,508 units of the Hector in July and 2,018 units in August. That is an almost 34 percent jump in sales.
Even the company had not anticipated the spike in demand. After raking in 28,000 bookings, it decided to temporarily stop accepting bookings.
Clearly MG has got something right. To find out what, I headed to its office in Gurugram to meet Gaurav Gupta, chief commercial officer at MG Motor.
Unanticipated Demand
I asked him about the decision to stop taking bookings and how that will bode for customer retention going forward. Gupta said the pillar of the company’s strategy is to be transparent and authentic in its interaction with customers.
“We took the tough call of being very open about it, that we have not anticipated so much of demand. It would be unfair for our booking customers to have a very long waiting period. That’s why we said let’s stop our bookings, let’s focus on the back-end, increase our production and come back at a time when we have our entire plan ramped up and confirmed,” he said.
MG Motor has started a ‘Worth Waiting For’ programme, where the company will educate one girl child for every two weeks that a customer has to wait for delivery of the car.
The response has been positive, according to Gupta.
On the slowdown gnawing at the rest of the industry, Gupta put it down to consumers looking for novelty. “In terms of bringing in an internet car, there was some novelty, new technology and somewhere I believe the consumer is looking for a change; looking for new offerings; some freshness and the overall package has really worked in our favour,” he said.
MG Motor is not resting on its laurels. The company has a journey to cover in building its foundation in India, said Gupta. “The focus is squarely on customer satisfaction and that means delivering on promises.”
What’s Next By MG Motor?
MG Motor is also focussing on electric mobility and is confident of success. The company’s second offering in India, which will be unveiled in December, will be the ZS EV.  The vehicle will go into commercial business between January and February 2020.
Regarding concerns over high input costs and practically no charging infrastructure, Gupta said, “As we bring in technology, the back-end begins to build up to support that. Yes there is range anxiety and also a lot of myths about electric vehicles but if we don’t bring the vehicle in, we would never know what work is required to get this entire sector moving.”
To meet that goal, MG Motor has tied up with Finland-based clean energy services provider Fortum to install 50 kilowatt fast charging stations at various locations in the country. These charging stations will be compliant with the CCS and Chademo charging standards.
It’s not just Fortum. MG Motor has also tied up with India’s Delta Electronics to set up charging infrastructure.
Regarding the role of the government in boosting the EV sector, Gupta has coined an acronym of his own. He calls it PICKY. P for Policy clarity, I for Implementation, C for Clarity, K for Knowledge sharing and Y for You, where the government and OEMs seems to be in caught in a tussle of ‘you do it.’
MG Motor is planning five new platforms over the next 18 months and will look to introduce more body styles in India rather than just SUVs.
The company will hope that customers remain picky.
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