After launching three car models, all above Rs 10 lakh, MG Motor India’s fourth product, Rajeev Chaba, the president & MD, says, will be more affordable than the Hector (Rs 12.83 lakh). In an interview with FE’s Vikram Chaudhary, he adds that while the festive season is expected to be good, the picture will be clear with the demand in the months of January to March next year.
Why is MG Motor India focusing so much on in-car technology?
Technology and innovation are a pillar of our brand throughout its 94-year-old history; that’s our strength and that’s what we want to showcase. This also helps the country in terms of localising such high-end technologies as well as upskilling the local workforce. We are training people at the grassroots level, we are working with IITs and other institutes, we are hiring more and more engineers, so at the end of the day this is a value-add to the economy.
I would say that a consumer who is buying a car anywhere between `30 lakh and `50 lakh will like to look at the Gloster as an option. Having said that, in that price range also, the kind of features we are offering I am sure nobody else is offering, including the luxury car manufacturers.
Why aren’t you focusing on small cars?
We are establishing our credibility on the product side; lower volumes allow you to have a relatively small team of employees and dealers and customers, so we are able to take care of all three pretty well. Next year our fourth product is going to be in the volume segment; you need volumes to offset your huge investments. That car will be more affordable than the Hector.
While many other carmakers have about 90% localisation levels, why is MG Motor still at about 70%?
In the Hector, the localisation, depending on the powertrain, is 70-75%. We have taken a conscious call to increase localisation. For example, for the ZS EV, we are talking about how to assemble the battery in India as soon as possible. In the Hector, we aim to increase localisation in 6-9 months.
How was your supply chain impacted due to the lockdown?
Supply chain, global as well as local, got disrupted. But now I think 80-90% issues have been addressed; we get a lot of components from China, but we also get components from Europe and the US. Supply side isn’t a problem, but we need to closely watch the demand side. While the festive season is expected to be good, the picture will be clear with the demand in January to March next year. The current demand could be pent-up demand and some people moving from public transport to private cars, but we will have to see whether this demand is sustainable or not, and that will be clear by January-March next year.
Do your customers perceive MG Motor as a Chinese or a British brand? If they perceive it as Chinese, will the demand for MG cars be impacted due to the current friction between India and China?
Globally, there are many examples of friction between two countries, but in the long run trade relations aren’t always impacted negatively, even though there could be short-term disruptions. The world is connected, thanks to globalisation, and free exchange of ideas, trade and people will continue.
Also, country of origin doesn’t guarantee the success of a brand. Consumers today are very rational and they will choose a product if they see a compelling value proposition in that. There would always be some consumers who may make an emotional decision while buying a product, and rightly so, but most consumers take decisions based on many factors. From our perspective, I think our sales numbers are healthy, our volumes are almost close to pre-Covid-19 levels, and luckily we still have some backlog in terms of bookings.
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