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Why emerging Chinese brand MG should have the big names worried

The MG3 city car has helped MG make a big splash.

It was always just a matter of time. Like the Japanese and South Korean brands before them, it took Chinese carmakers time to understand the demands of the Australia new-car market and adapt accordingly.

Now, MG, the once famous British sports-car brand, is beginning to make an impact on the sales charts for its Chinese owners.

While a far cry from the MGB of years gone by, the current line-up of the MG3 city car and ZS and HS SUVs are making an impact on the sales charts.

While still only accounting for a modest 0.8 per cent market share in the 2019 sales figures, MG sales were up 175 per cent and Chinese cars were up more than 70 per cent. Of course they are starting from a very low base, but the growth is undeniable.

To put MG’s growth in perspective, it outsold several more established brands in 2019, including Skoda, Peugeot and Jeep.

Much of the success is built off the back of the MG3, which accounts for more than half its total sales. Year-to-date, it’s the second best-selling city car behind only the Toyota Yaris.

Although it is a declining market with several major players leaving, namely the Hyundai Accent, Honda Jazz and Holden Barina, the result is still a positive one for MG.

While MG is taking advantage of a market now being abandoned by the bigger brands, the strategy of affordable small cars to entice newcomers to the brand certainly worked well for the likes of Hyundai and Kia in the past.

MG may have a long history associated with the name, but the current iteration of the company only dates back to 2007, when it was taken over by China’s state-owned SAIC Motor. That means the brand hasn’t had to worry about legacy vehicles and instead focused on segments that matter.

As a result, it has two SUVs in the market today, the ZS that competes against the likes of the Mazda CX-30 and Kia Seltos, and the newer HS, a rival to the Mazda CX-5 and Toyota RAV4. Neither have yet to enjoy the same success as the MG3 in terms of sales, however, as the SUV contests are much tougher with more competition.

MG will try and make itself stand out from the crowd when it launches an all-electric version of the ZS late in 2020. It will only be the second EV of that size (after the Hyundai Kona) and could be very competitively priced, with the first 100 orders pre-sold for $46,990 driveway, making it the most affordable EV sold in Australia yet.

There’s no confirmation yet on the ZS EV retail pricing yet, but if it can remain the cheapest electric vehicle it would give the Chinese brand another strong selling point to Australian new-car buyers.

Another reason for the company’s improvement can be the introduction of a seven-year warranty across the range.