Exclusive: Fresh start for MG in Australia

CHINA’S biggest motor company, SAIC Motor Corporation, is set to take direct control of MG car distribution in Australia after an unsuccessful attempt by independent operator Australia Longwell Motor to gain a toehold for the former British marque here.

SAIC – formerly Shanghai Automotive Industry Corporation – is establishing a new office in Sydney to relaunch MG in the first quarter of 2016, armed with an expanded model range and factory-backed support for a proposed national dealership network, recruiting for which starts next month.

Shanghai-based SAIC is the Chinese joint-venture partner of General Motors and Volkswagen with an annual production roster of more than 5.6 million vehicles.

It also offers its own brands, including former British marques MG, Roewe (formerly Rover) and Maxus vans (known in Australia as LDV), with MG and Maxus leading its export charge.

A new entity, SAIC Motor Australia Pty Ltd, is expected to get a Chinese managing director, while CEO of MG Australia will be Jason Pecotic, the former managing director of Sydney-based Chinese vehicle importer WMC and former key figure in Foton Van distributor VSA Distributors, of Queensland.

Mr Pecotic confirmed to GoAuto that SAIC is set to take responsibility for MG in Australia on January 1.

He said launch vehicles were due to be produced in January and shipped to Australia in February ahead of a March 16 sales launch.

Two models will be available at first – the newly facelifted, Thai-built mid-sized MG6 in liftback hatch and sedan guise, and the Chinese-sourced MG3 light hatchback.

A third model, the Thai-built MG GS mid-sized SUV, will be added in the third quarter of 2016. A fourth car, potentially from MG sister brand Roewe, also is being considered.

Negotiations for the franchise transfer have been going on since last year, but GoAuto understands a deal has been reached and paperwork should be wrapped up by the end of this month.

The mysterious Chinese-based Longwell Motor acquired the Australian rights for MG in 2013, but in the two years since, it is believed to have sold just six MG6s, partly because it ran afoul of Australian Design Rules over non-compliant child seat mounting points when the ADR changed and then fell into dispute with SAIC.

It had only one dealership, established by Longwell in Sydney’s Parramatta Road at Petersham. A national retail network failed to materialise.

Having lost patience with the arrangement, SAIC will become the second Chinese motor company to set up its own distribution operation in Australia, following close behind Great Wall Motors’ Haval Australia SUV network that opened for business this month.

The Longwell-SAIC settlement includes an arrangement to buy back 388 unsold MG6s, many of which have been sitting on grass in Sydney, Melbourne and Brisbane for up to two years.

These superseded vehicles are believed to have been offered to fleet vehicle leasing companies for bargain-basement two-year operating leases.

With the old stock of MG6 out of the way, SAIC will import a fresh batch of the latest facelifted MG6 liftbacks and sedans for the relaunch. These will be the same specification as those launched in the United Kingdom in April.

For the first time, the MG3 light hatch will be offered here, but initially only in manual gearbox form until a suitable automatic transmission – now under development – comes on stream in the first half of 2017.

In other markets, an automated gearbox is offered as an alternative to the manual gearbox, but that has been deemed unsuitable for this market.

The MG GS mid-sized crossover vehicle that was launched in China at the Shanghai motor show in April is also locked and loaded for Australia from the third quarter of 2016, with other models – possibly including a Roewe car rebadged as an MG – to follow.

Mr Pecotic said that under the new arrangement, SAIC would make the MG6 more viable by offering it with an automatic transmission from launch. Previously, it came only with a five-speed manual transmission.

He said SAIC had committed to offering automatic transmissions for all MGs sold in Australia, although the MG3 would be without one until a unit now being developed came into production in early 2017.

Mr Pecotic said MG Australia next month would advertise for expressions of interest from dealers for its national dealer network, with opportunities in all states and territories.

In an exclusive interview with GoAuto, SAIC Automobile Import and Export Company executive director Joy Zhu said in Melbourne that SAIC had fixed the ADR glitch with a compliant child seat tether point in the MG6.

He said the problem had arisen when the ADR on child seat tethers had changed while the cars had been sitting unsold, but the modification had been simple.

Mr Joy said that although SAIC Australia would handle MG distribution in Australia, it would also act as a regional office for other countries such as New Zealand.

He said the current NZ distributor was doing a good job and would remain in place.

“Even though we will have a regional office here, it will be for branding and support for the distributor,” he said. “But in Australia, we will do our own distribution.”

Mr Joy said SAIC had been setting up similar regional offices around the world in places such as the Middle East, South America and Russia, to not only handle MG but also SAIC’s other export brand, LDV commercial vehicles.

He said LDV would continue to be distributed in Australia by independent importer Ateco Automotive.

Longwell, on the other hand, would not be part of MG’s future in Australia, either as distributor or dealership.

Mr Pecotic said negotiations were underway for a property to house the new national head office for SAIC and MG in Sydney’s inner east, between the CBD and the airport.

The iconic MG (Morris Garages) sportscar operation was snapped up, along with fellow British brand Rover, by Chinese car manufacturer Nanjing Auto after MG went into receivership in 2005.

The brands came to SAIC when it took over Nanjing and elected to make MG one of its key own-brand planks.

Despite Chinese management of MG, the design and engineering functions are still done at MG’s traditional home at Longbridge, in the English Midlands.

Rover was rebranded in China as Roewe, but Mr Joy said there were no plans to introduce that brand to Australia.