New Delhi: MG Motor India Pvt. Ltd, the local unit of the iconic British car maker that is now owned by China’s SAIC Motor Corp. Ltd, will start selling cars in India in the next two months. The company is planning to introduce hybrid and electric vehicles in its first year in India.
In an interview, Rajeev Chaba, president and managing director of MG Motor India, said the company will release only retail sales data as opposed to most of the competitors and will start with just a few dealers to ensure profitability in a very competitive market. Edited excerpts:
You have spent almost two decades with General Motors. How different has been your experience till now with MG Motor?
I learnt a lot from General Motors (GM) and the company gave me a lot of exposure in different roles across countries. I was a part of Opel as well when it was launched in India. Here, the brand MG Motor is British but in terms of scale (compared to GM), it is much smaller.
That means a lot of people don’t know about the brand; we have to start from scratch. The good thing about the ownership is that SAIC is the biggest Chinese (car) manufacturer and it has got huge resources, is highly profitable and is one of the future-ready companies in the globe in terms of developing technologies required for electric, hybrid and fuel cell vehicles. So, all these resources are available to MG Motor as well.
How will you ensure that MG becomes one of the very few foreign brands that will get the India strategy right?
For most of the global players here in India, the first solution for any problem is a global one. That’s a default setting. For a company like MG though, the first solution is to ask the local management what they want to resolve an adverse situation, rather than offering a global solution. So, that’s a huge difference. Only two companies have managed to crack the Indian market and if you look at their history, it has taken more than just investments to get the strategy right.
They have worked a lot with the local people to understand the local market. For both SAIC and MG, this is one of the few global markets and success here will lead to entry in many other markets.
What will be the strategy regarding setting up dealerships and maintaining their profitability?
Most of the manufacturers did not invest much in dealer processes, customer systems and cost of ownership issues. We need to invest in the fundamentals. We have got probably the best dealers in the country and the best team for sales, service and marketing for our products.
Our policy is that we are going to grow with only a few dealers, though we will give them many outlets. So we may start with 40-45 dealers, but in a number of locations; and after five years, this may increase to 60, not 300 or 400. In Bengaluru, MG will have five outlets but with just one dealer. That means we are selecting dealers carefully and they do have the financial strength to invest in the future. Also, we will always talk about retail sales and not wholesales, and dealer partners are enthused by this decision.
How will you tackle competition from Maruti Suzuki and Hyundai in the initial years?
In our first product, we don’t foresee any competition from Maruti and Hyundai, and it has been very strategically done.
When we looked at this particular segment, it was just one product and now another couple of products have been launched. So, if we get the fundamentals right, then we can lead this segment.
We have told our dealers that they should take care of customer satisfaction and we will take care of their viability.
When it comes to future mobility solutions, what will MG offer the Indian customer?
Very few people know MG the brand in our country, so we need to spread awareness to start with. Then, with technology, expect us to be a disruptive force and we will try to introduce different ways of selling cars and will experiment with technology. We are going to be the first company to offer an affordable mild hybrid in a mass market vehicle. It will be a petrol hybrid and will bridge the gap between petrol and diesel as the price gap will be significantly lower. We will also launch the Hector with an automatic transmission.
To what extent will be the exposure to diesel for the company in India?
It’s a judgement call now and, given the trend currently, after BS-VI comes into effect, diesel vehicles will be even more expensive. So, I think we will have to be very careful about diesel as we go forward and we will have more hybrid and electric vehicles compared to diesel-run products; but in some segments, if diesel is required, we will have the option.