Inside the New Chinese-Owned MG Motor Co.
In the town of Longbridge, just outside of Birmingham in the U.K., British workers assemble an all-new MG model from kits imported from China. We went up to the once-sprawling industrial site to check out the operation, where China’s SAIC employs 300 engineers, runs a design studio, and screws together mostly finished cars. Welcome to the future.
Plans for World Domination?
In spite of the banner, much of the design, engineering, and construction for the MG6—and for upcoming models—was done in China. A staff this small can’t execute an entire product line on its own. But the impression that MG is British isn’t just helpful for sales in the U.K., where only a few hundred MG6s will be sold this year. Chinese shoppers mostly prefer western car brands to domestic ones. The ability to say not just that MG is a British badge, but also that the engineers and designers work in the U.K., and that you can see these very cars on British roads, may help persuade customers that they’re getting a piece of Europe, not of Shanghai. It’s not to say that SAIC isn’t taking the British market seriously, and the MG6 probably will be offered in continental Europe, too. But we suspect that even if MG never made a profit in Europe, it would still be a worthwhile investment as a way of legitimizing the brand in China and other developing countries.
Whether MG is in the right position to become a major player doesn’t really matter, though. This is the first inroad from a Chinese company selling vehicles that were at least partially designed, engineered, and manufactured in China in the western world. (We’ll exclude a handful of sales of a Chinese pickup truck in western Australia, because Perth doesn’t count as the western world.) In the next 25 years, we can expect to see a lot more Chinese companies selling their cars in Europe and the U.S. Apple has figured out how to sell California-designed, Chinese-manufactured products in the U.S., and with enormous profit margins. It won’t be long before Chinese car companies crack that code, too.