Under the Microscope: We talk to MG's head of sales, Matthew Cheyne
18 August 2017
Author: Rachel Boagey
While the UK's new-car market is beginning to feel the effects of a challenging political and economic climate, MG is seeing a 5% increase in year-to-date sales figures and expects to break 5,000 new-car registrations by the end of the year.
The MG Longbridge dealership near Birmingham no longer produces cars but is now one of 77 dealerships in the UK retailing under the MG brand and home to the manufacturer's new model range, one that has pushed the brand to become one of the fastest-growing in the UK.
"It's an interesting time for you to come and see us as we're about to witness a growth of models, as well as changes to the way that we operate," explains Matthew Cheyne, head of sales and marketing at MG Longbridge.
Cheyne began working for what he describes as "the sleeping giant" around three and a half years ago and, since then, has worked on putting together a strong team and dealer group as a base from which the brand can grow. "The next step is a product offensive, which has already begun with the penetration of the MG3 and MG GS, as well as the launch of our all-new compact SUV near the end of the year."
Of course, investment is an important part of the package, and Cheyne explains that with SAIC, which is based in China, as MG's parent company, investment in new models is never an issue. "All of the things that people associate with MG Rover, such as a lack of investment and ambition, no longer apply. We also aren't driven by egotistical targets to reach numbers that don't have any bearing, so that's something that is going to help the company grow organically."
In the past, to try and increase its positioning in fleet, MG turned to rental, which Cheyne says didn't do the trick. "That was the idea of my predecessor, and I think I could similarly go out there today to try this tactic and post an enormous number, but it's not the right way to build this business," he states.
Instead, Cheyne uses a football analogy to describe the evolution of the brand in fleet. "We're not going to compete with those premiership clubs, their customer demands and that level of discount. The championship is a bit easier but the bottom of championship and top of the first division is where we're actually really competitive," he says.
While Cheyne doesn't predict that MG will become one of the biggest names in fleet, the next couple of years will see it increasing its fleet-to-retail ratio from around 5-6% now to nearer 10% next year. "After that, we will really ramp it up but, again, we want to grow in the right manner," he says. "I would rather be talking to 100 affinity companies and doing one or two cars a month with them, and looking after customers properly, than transport a load of cars into an airfield and never see them again. The balance we have this year and next year will put in the foundation that will allow MG to really take off and be seen as a genuine competitor."
Interestingly, Cheyne says that within the blurred edges of a traditional fleet and traditional retail customer is where MG will position itself. "It happens so often that a fleet customer goes into a dealership and gets bad customer service. By including the dealer network, we're building that relationship in the local area. We believe that if a business car user goes into a local dealership and gets a good experience, he will tell his retail friends and family, and that's where we believe our growth will be in the long term. We will never lose sight of our retail customer as I believe they are the advocate of our business customers."
One of the main challenges for Cheyne has been changing the customer profile of MG. "When I started, we were dependent on 65-year-old people who had an affection for the brand. While there's nothing wrong with that, to grow the brand, we need to encourage new customers into our product range, including younger people," he says. Since then, the average age of MG customers has dropped from 65 to around 45 and, with the new products coming out, MG believes that age can be further decreased by around ten years.
The product offensive
Now that the audience is where it needs to be, the next step for the manufacturer is an acceleration of new products. The current line-up consists of the MG3 supermini and MG GS SUV; next year, the company will be launching the MG XS SUV.
One of the main USPs of MG, according to Cheyne, is the price of its models. For instance, the GS range starts from £15,095, making it £4,000 cheaper than an entry-level Qashqai.
In the user-chooser market, Cheyne believes the XS will be the best vehicle by MG so far. "The quality and spec of the vehicle is by far the best we've produced but we have maintained its affordability. The things you'd have to pay for as extras on competitor cars are standard on ours. From a monthly cost point-of-view, for fleets, we're pretty amazing.
"We can offer these prices because we operate on a more-car-for-less-cost basis. On our cars, you get so much more specification that you don't have to pay for.
We produce our cars in China, and we are constantly looking at ways of reducing costs and being more efficient. We also don't have an incredibly complex line-up."
The XS, for example, will come in three different trims and two powertrains. From the perspective of a leasing company, therefore, Cheyne explains that it will be easy for them to use MG due to simplicity of choice, and their customers will be able to have a high-spec car without doing much research for themselves.
Another important part of MG's sales appeal is fair and honest pricing. "What I don't do is put on a massive false margin then discount on it. We don't overprice to reduce; what we do is say, 'that's a fair price for that vehicle and that's the price it is marked as'."
But Cheyne admits that even with such a great line-up, "the biggest problem we have is that people don't know about us".
It seems an interesting choice, then, that the manufacturer has turned its back on diesel. "We did away with diesel, which was probably an unpopular thing to do. But within around 18 months, our first electric and PHEV vehicles will launch in the UK. Going forward, we will offer an alternative to the company car buyer that is affordable and works."
Even range anxiety is not something that keeps Cheyne up at night. "We all know there are solutions already; we just need government support to adopt the infrastructure. We are all about innovative solutions and it is feeding from our parent company in China, where they already have highly connected and electric cars."
Another model launch will be the e-motion, which Cheyne explains will have enough range at over 300 miles to appeal to most people.
This model, as well as the other vehicles in MG's line-up, is not just relevant to today's market but also tomorrow's. "Our whole line-up offers top-of-the-range technology, design and efficiency.
The company is in a prime spot for growth as it's being shaped in today's modern age and is not set in its ways. We expect to have 90 dealers in place by the end of this year, which
is quite an exciting prospect. Now that the sleeping giant has awoken, soon enough, our brand will become a viable choice for fleet and retail customers alike," Cheyne concludes.