If there is one car brand that can be a good example of economies of scale, good marketing, and profitability, that’s Dacia. It was revived by the Renault group after taking it over in 1999 and since then it has become the cash cow of the French manufacturer. They are appealing no-frills cars that are the perfect choice for those drivers looking for private means of transportation that is both good (quality) and affordable (low maintenance cost).
The success in terms of sales is also attributed to the lack of direct competitors, at least in Europe, where it sold 90% of its global volume last year. Despite the evident reasons for the popularity of its cars, Dacia is still the only low-cost brand available in the continent. Neither Volkswagen nor ex-PSA developed a stand-alone brand to compete against it. However, this could change soon, and the player is coming from far away.
The revival of a British brand
MG is slowly becoming an important player within the European EV market. By making use of its British origin, the Chinese from SAIC, its current owner, is expanding its presence all over the world. They offer very competitive products that include saloons, SUVs, and even hatchbacks and estates. Their focus is on bringing affordable electric cars that are both appealing and modern.
And the formula is paying off. Their registrations doubled during the first 8 months of this year in Europe, totalling 58,300 units. This is more than the volume registered by Honda, or Mitsubishi, and is 70% of the volume registered by Suzuki. MG was able to hit the European top 25 by brands, with the highest percentage increase.
It is important to notice that MG is still not available in all European countries (by August, it was still missing in Switzerland, Poland, Czech, Portugal, Slovakia, Romania, Hungary, Estonia, Lithuania, and Latvia). These markets combined represented 13% of the European total volume.
Affordable EVs is the key
But if MG’s market share within the overall European market is still very low – 0.82% through August – it has a more comfortable position within the pure electric market. According to the data provided by JATO, this make made up 2.6% of the registrations of pure electric cars between January and August.
MG is applying the same formula that allowed Dacia to outperform over the last years, but in the electric car market. The average price of its electric lineup was lower than those of the majority of mainstream brands in Europe. For example, the MG ZS EV, its electric B-SUV, is cheaper than its rivals from Opel, Peugeot and Hyundai.
The MG5, an electric estate in the C-segment, is the most affordable choice within the segment. The same happens to the MG Marvel R, the flagship of MG in Europe. Its average retail price in Europe is €47,221. Its direct rivals are priced between €49,831 and €65,484.
Consequently, MG is attacking the emerging electric vehicle market from below, just as Dacia has been doing it in the internal combustion engine market.
The author of the article, Felipe Munoz, is an Automotive Industry Specialist at JATO Dynamics.