MG3 pricing.

A little bird tells me that prices for the MG3 may start at 60,000rmb

That is less than £6,500 for the base model. Other models will be

be priced a lot more than this. I do hope this info is correct because

if it is, we will have lift off. Info gathered from China Car Times.

Hmmmm, that is good news and I hope it is correct.

I do hope that they exercise caution and don't price it too cheaply though otherwise it will devalue the brand.

It is still a great British brand!

£6500 OTR in the UK would be a steal but I can't imagine that happening - it would be the cheapest car in the UK! Dacia is no-frills - not even body coloured bumpers, whereas the MG has body kit, alloys, all sorts of little fiddly bits - its a different proposition.

If they price it at that level they'll do very well indeed, but the changes for the EU market will have to bump that up significantly.

My concern is that they choose a high price to reflect 'brand values' which flies in the face of public perception. The MG6 has a strong price tag - many will say it's worth it, but it hasn't shrugged off the 'cheap Chinese rubbish' label that has been (unfairly) stuck on it, mainly because early examples had iffy levels of quality. If the MG5 HAS been cancelled - or seriously delayed - then there is a danger that they stretch the MG3 pricing upwards to meet the entry-level MG6 model; would they dare do an MG3 for £17k??

Pricing ought to have been something like:

MG3 - £7995 - £13995
MG5 - £11995 - £17995
MG6 - £16995 upwards

So there would have been every model group and budget covered, with overlaps. If the 5 is missing and they don't drop the price of the MG6, then the MG3 could be way overpriced if they aren't careful. Nobody wants to see another CityRover situation...

adaveabbott wrote:
A little bird tells me that prices for the MG3 may start at 60,000rmb

The cheap ones in China have 1.3L engines which the UK will not get so we should expect it to be a bit more than this price, plus there are the shipping costs. It can still be a cheap car though if they want to sell it cheap.

Morris Motors wrote:My concern is that they choose a high price to reflect 'brand values' which flies in the face of public perception. The MG6 has a strong price tag - many will say it's worth it, but it hasn't shrugged off the 'cheap Chinese rubbish' label that has been (unfairly) stuck on it, mainly because early examples had iffy levels of quality.

You don't get big sales just by low prices, or we would all be driving Peroduas.

The fact is, ordinary people don't know about the MG6, even more so than the fact that most people had no idea that Rover survived closure in 2000 or that you could get MG saloons (I am forever having to explain what my ZS is!), so there is no wide *public* perception of MG now.

Just been reading a test Fiesta/ Rio/ Corsa/ 208/ Ibiza. The Peugeot has the cheapest headline German price in this group (not the Kia!) and the Ford is second highest even without a radio...

Are there any tv comercials on ITV or so.
I never seen it
Will all depens on what you get for that price will it get buyers.

patpending wrote:You don't get big sales just by low prices, or we would all be driving Peroduas.

The fact is, ordinary people don't know about the MG6, even more so than the fact that most people had no idea that Rover survived closure in 2000 or that you could get MG saloons (I am forever having to explain what my ZS is!), so there is no wide *public* perception of MG now.

Just been reading a test Fiesta/ Rio/ Corsa/ 208/ Ibiza. The Peugeot has the cheapest headline German price in this group (not the Kia!) and the Ford is second highest even without a radio...

Well I agree - they need PROPER marketing; they can't carry on with just two or three people fiddling about with Facebook and Twitter. Their press releases still contain typos and inaccurate information, and trying to get a response can be torture!

They need to hand it all over to an agency and allow them the freedom - and BUDGET - to make something of it or it'll be another below-the-radar flop. I saw a response on Twitter saying that the MG3 would be accompanied by tv advertising, but it must be better than the film they did for the MG6 - that was fairly pointless. They need an ad for the UK market featuring UK spec cars, details of prices and deals. The MG6 as was more of a 'brand film' - very nice but rather directionless and obviously foreign.

If they take the same approach with the MG3 as they did with the MG6 and end up selling 10 or 15 a month, will SAIC be happy with that? How many dealers will stick around then? They MUST get this right and, unfortunately for them, that means investing in PROPER PR.

Morris Motors wrote:Well I agree - they need PROPER marketing; they can't carry on with just two or three people fiddling about with Facebook and Twitter. Their press releases still contain typos and inaccurate information, and trying to get a response can be torture!

They need to hand it all over to an agency and allow them the freedom - and BUDGET - to make something of it or it'll be another below-the-radar flop. I saw a response on Twitter saying that the MG3 would be accompanied by tv advertising, but it must be better than the film they did for the MG6 - that was fairly pointless. They need an ad for the UK market featuring UK spec cars, details of prices and deals. The MG6 as was more of a 'brand film' - very nice but rather directionless and obviously foreign.

If they take the same approach with the MG3 as they did with the MG6 and end up selling 10 or 15 a month, will SAIC be happy with that? How many dealers will stick around then? They MUST get this right and, unfortunately for them, that means investing in PROPER PR.

Yes, I think you're right - the budget they need is far higher than the return they can get from selling two models of car.

When the MG3 arrives at the dealers we need a big push. And before, too, presumably - why not link to BTCC success?

And if we are genuinely going to get new "big boy" dealers on board in the "black hole" areas like London/ Surrey, MG are going to need to wop a wad onto the counter.

I think we sometimes forget how much we know - even the people who dislike the new cars!

With the best will in the world, sometimes their PR seems like its done by my mother - "Whats your favourite colour?" being a prime example from their facebook page.

They have to take a tough decision - continue to sell 20 - 40 cars per month on the current budget and be a bit of a laughing stock (and still make a loss), OR dig very deep and do it PROPERLY, sell hundreds, maybe thousands and be taken more seriously (and still make a loss due to the PR costs).

They aren't making any real progress and are still working on establishing themselves; in that sense they can't expect to return much of a profit until they are further down the line. If the next few years are just loss making, they may as well do it properly and in a less embarrassing manner!

I've just seen SAIC's 2012 marketing budget, they spent £710,736,000.00 which appears to be about the highest of any Chinese company. For every £1 spent they made a profit of £3.05, second best.

http://www.iaudit.cn/News/ShowArticle.asp?ArticleID=149750

Going back to the title of this post, I dont think we are going the see the MG3 as a budget offering especially as Guy Jones is quoting the Adam, DS3 and Mini as competition. MG are not positioning themselves as a budget brand and look like they have worked hard on developing the 3 into an attractive and hopefully quality product. Following the pattern they used with the 6 (15.5k for the entry level S spec., then 17k and 19k for the others) I expect to see and entry price for the base MG3 at about £10,500 with the other two trim levels at about £11,995 and £12,995, plus of course the cost of all the options they speak of..still very competitive in the supermini class and at least enough to be able to afford a marketing budget. Cheap cars have to make money by selling in big numbers to cover the costs and with the MG 'manufactured in China and assembled in UK' strategy I dont think they can afford for the product to be cheap. It looks nice though and despite being a bit coy about my age I have alredy signed up to test drive some 'FUN' !

I agree - some people think they need to 'do a Dacia' but the cars are a totally different proposition. However, if they *could* do them dirt cheap it would be a hell of a coup. But only MG know the cost price and what margin they want to make.

Morris Motors wrote:I agree - some people think they need to 'do a Dacia' but the cars are a totally different proposition. However, if they *could* do them dirt cheap it would be a hell of a coup. But only MG know the cost price and what margin they want to make.

I am reminded of the economic proposition that things are worth what it has cost you to make them, in which case B*Ws would be cheaper and BMC Minis would have been more expensive.

I think MG need more marketing, but that doesn't mean they should be Poundstretcher cheap as opposed to Asda or even Aldi price. Imagine what you would say if you were Clarkson - the opposite of British-made Stella Artois' "reassuringly expensive"...

"Cheap" is only a bad thing if it's "cheap and nasty" - assuming the car is reliable, FUN, well put together and a genuine Yaris/Fiesta/Corsa rival then to undercut them massively could only be to their benefit. This is the point about Dacia - they are cheap but they're also bloody awful!

Ultimately MG are in the business of making cars to make money, but are they a profitable part of SAIC or is it subsidised by the Chinese JVs? And is MG Motor UK itself making a profit? They have fairly low overheads as they own the Longbridge site and most (if not all) of the staff actually work for SMTC UK - things like that make a big difference.

Assuming MG UK 'buy' the cars from the Chinese parent, presumably the Chinese parent makes a margin or sells at cost - either way we can assume the Chinese aren't making a loss at that point. MG UK then spends (a little) money on marketing and PR, the BTCC, dealer training, demo models and shows, plus the staff that are on the books. MG then offer discounts and do deals and sweeteners to get customers interested - all comes off the profit per unit. Plus any warranty costs. I'd guess that, given the very low income they seem to be generating, MG UK runs at a loss and the Chinese parent bail them out periodically. They could carry on that way OR the Chinese plants can let them have the cars at below cost price; massively discounted so that they can't fail to make a profit on the units they do sell.

Apologies for the rather random post but I'm just theorising - I'd say that either way the parent company is subsidising MG UK for the time being and will do for the foreseeable future, and, that being the case, they may as well push down the OTR price and buy a slice of the market, generate more publicity. The best PR they can get, ultimately, is MGs running on British roads in volume.

I like morris motors comments. My thoughts are perhaps a starting price of

£7,500 for the base model, rising quite steeply, as more goodies are added to the package.

When the MG3 is launched, they must cater for all classes of people.

Most of all, they must start selling in much larger volumes that they are at present.

I agree that the entry level price for the MG3 will be critical but I will still be surprised if it is below £10k. At that price they will be offering a well spec'd 5 door car with a 1.5L engine for the same price or less than most competitors are offering their entry level 1.0L 3 door cars. Apart from Dacia of course, but then I dont think MG want to go there..

Skoda are doing the Fabia for 8995 now.

Morris Motors wrote:Skoda are doing the Fabia for 8995 now.

I think MG see themselves competitive on price with Skoda, Kia etc. so maybe thay will do an MG3 at £9k but I doubt if they will make any money on it. Their whole strategy (including the one involving not doing any national advertising) all seems to be based on low volumes and I think their UK boss William Wang said some time ago that the manuafactured in China, assembled in UK system was not a very economical way of doing things, but was offset by the benefit of claiming 'UK designed and assembled' cars. I think they are quite aware that expensive national advertsing and low prices would bring them more sales, but it is just not something they can afford. Better to make a bit of money on selling 100 cars a month than loose lots on 500 a month..

Dorset Rocket wrote:
I think MG see themselves competitive on price with Skoda, Kia etc. so maybe thay will do an MG3 at £9k but I doubt if they will make any money on it. Their whole strategy (including the one involving not doing any national advertising) all seems to be based on low volumes and I think their UK boss William Wang said some time ago that the manuafactured in China, assembled in UK system was not a very economical way of doing things, but was offset by the benefit of claiming 'UK designed and assembled' cars. I think they are quite aware that expensive national advertsing and low prices would bring them more sales, but it is just not something they can afford. Better to make a bit of money on selling 100 cars a month than loose lots on 500 a month..

Volumes will be relevant with the high overheads of rental and admin.

However, the Mini reportedly lost money - not only can MG not afford that for the 3, they need to look at what will happen when the CS is introduced. Maybe we won't be getting the 5.

And what will the dealers do over the next year - what will they sell?

I am sure (I hope!) that the 3 will sell in greater volumes than the 6 and will be the main retail seller for the dealers. Hopefully, as the dealer network expands in anticipation of this, then the justification for (at least some) national advertsing will come. I think the 5 is already off the agenda for the UK and the recent reduction in dealer numbers partially refelects the fact that they know only the 3 and 6 will now be available in the UK until the CS launch in 2015/16. Lets hape that there are some new dealers out there who are prepared to sign up on now this basis..

I think the reduction in dealer numbers was nothing to do with MG - they just walked! MG keep saying they want to expand the network. I'm sure the 3 will be the big seller; it can't sell less than the 6 anyway. Its an easier car to sell - lower price, second car type slot.

I'm thinking of getting a 3 for my first car, although it depends on the finance options. Does anyone have any ideas?

Morris Motors wrote: They have fairly low overheads as they own the Longbridge site

No they don't, I can't imagine the sort of rent they pay to St. Modwen on that place.


Anyway, the MG ZR used to list at about £10k with windy windows.

Every MG3 comes with 4x Electric windows and aircon.

Well we were discussing the site ownership on another thread. MGR didn't sell all of it - they excluded the HQ building I think which was part of the bundle of assets bought by NAC, yet MG don't seem to own any feeholds now. So yes, it would appear they lease at least a large part of the site after all.

I wonder whether that's economical...

Your point about comparing the price to the ZR is interesting. I suppose it depends on whether the car is a true successor; the ZRs were 'tuned' compared to the 25 so the MG3 needs to be more MG and less Rover.

Its a very interesting future thats for sure. I like the look of the 3, much more MG than the 6 is.
I tried a 6 and although a decent car, it just didn't push the MG buttons for me so I stuck with my ZS.

Interesting. MG want to move more 'mainstream' so that may mean that the cars will be a compromise between the softness of a Rover and the rawness of the recent MG Z-series.

Morris Motors wrote:
Your point about comparing the price to the ZR is interesting. I suppose it depends on whether the car is a true successor; the ZRs were 'tuned' compared to the 25 so the MG3 needs to be more MG and less Rover.

If you compare a ZR 105 to a unrestricted 25 1.4 the only real difference is in trim.

Different trim on the seats, colour coded exterior parts and a couple of small stick on spoilers,
Lower/Stiffer spring rates.

In actual fact the 25 was always much better spec'd to the equivalent ZR.

Morris Motors wrote:Interesting. MG want to move more 'mainstream' so that may mean that the cars will be a compromise between the softness of a Rover and the rawness of the recent MG Z-series.

MGR saw itself as a niche player, being niche as a car company is rarely sustainable.

Morris Motors wrote:MG don't seem to own any freeholds now. So yes, it would appear they lease at least a large part of the site after all.

I wonder whether that's economical...

Total costs for MG Motor in 2009 and 2010 were around £21m of which staff £3m - £3.6m.

SMTC paid MG Motor just under £10m rent in 2010 EDIT but only £2.2m in 2011!

I think it's time to buy some newer accounts!

EDIT 2011 accounts ordered. £1 from Companies House, £6 elsewhere!

Roverman wrote:

Morris Motors wrote:
Your point about comparing the price to the ZR is interesting. I suppose it depends on whether the car is a true successor; the ZRs were 'tuned' compared to the 25 so the MG3 needs to be more MG and less Rover.

If you compare a ZR 105 to a unrestricted 25 1.4 the only real difference is in trim.

Different trim on the seats, colour coded exterior parts and a couple of small stick on spoilers,
Lower/Stiffer spring rates.

In actual fact the 25 was always much better spec'd to the equivalent ZR.

The ZR 105 was a popular model, but it was part of a range. If ALL of the ZRs had the same 'soft' engines as the equivalent Rover, they wouldn't have got so much respect and wouldn't have been seen as very special. If MG now only offer cars with 'standard' power units, it may undermine their image somewhat. Offering the de-tuned cars is essential, but they need the tuned ones too as a comparison.