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I first ask them both if they feel the current semiconductor crisis has worked in MG's favour. Pigounakis is quick to state this presupposes that they've had better supply than some of our competitors. He says: "I think that's partly true, but not entirely. We've been very adversely affected on ZS EV for instance. That has been our best-selling electric car, and we have several corporate customers who would like to order significant numbers of them, but frankly we have a bit of a dilemma to know exactly what to tell them.
"You don't want to ever tell a customer that you won't take an order, but we must be completely honest and transparent with these people. If we do, it's going to be 12 months before it arrives.
"The next part of that challenge is holding the price and terms - because, of course, in 12 months, costs can rise and have been rising exponentially, in terms of material cost, and in terms of logistics costs as well. It makes you look at what level of commitment you're prepared to make to that customer, when lead times stretch to 12 months.
"I think we've done well with supply up to now, for the MG5. I think it's fair to say. Then again, we haven't taken any orders for that car since April, because we were waiting for the new model - that's cost us business.
"I think in terms of EVs, some manufacturers have had a dreadful time, but I think in terms of availability, we've been pretty much average.
"There is this conception amongst our peers, that the only reason why we're being successful is because we've got cars to sell - and they haven't. We're sitting on 10,000 orders - 3,500 of those are almost 12 months old - so the chip shortage has massively impacted us as well on EVs - in terms of complexity of semi-conductors, and battery supply. Battery supply on EVs is as bigger issue as semi-conductors, all brands have been significantly affected."
Isaac agrees and, ZS EV aside, he is extremely pleased with how things have gone over the last couple of years. He says: "We've seen consistent growth, and because our product is really good quality, well-specced and competitively priced - that's where we get our advantage.
"We have won some business where perhaps we've had some vehicles that we could supply sooner than some of our competitors. The feedback we're always getting from conquest business, and most of our business is conquest, is how pleasantly surprised they are with the product. The brand awareness has always been there, anyone over 40 would recognise and remember the old MG - but there's no negativity towards the new cars.
"I've got a team of experienced professionals, that are out there talking to leasing partners and end-user fleet customers. We've always had the mantra with our customers that we're easy to do business with."
Pigounakis points out that one of the debates they had earlier this year, was whether they would engage with the fleet market. He says: "Frankly, we could sell every car we can build down the retail channel and make a lot more money. This is about medium and long-term planning, with the customers we're talking to now, we're building long-term relationships and they're buying thousands and thousands of cars from us.
"We want to be selling cars to these customers in five or ten-years' time - when we're selling 100,000+ cars a year. To deny long-term customers access to our products, so we can take short-term advantage, would be entirely the wrong decision in the medium term.
"In terms of the supply chain, we've treated fleet customers and retail customers the same. The only different conversation taking place is if someone wanted to order hundreds of ZS EV. In terms of leasing, end-users, and retail orders, they're treated the same way and there's no prioritisation."
Isaac goes on to tell that in terms of blue chip and PLC, they're not just talking to organisations in the public and private sector. He says: "I'll give you an example of a major organisation in the UK. We went on their essential choice list in June of 2020, as we won a tender to with HS plug-in and MG5. They were the two cars they selected and within the six months from June to September of 2020, we'd already taken 200 orders from this tender with that company. This has continued throughout this year and we've had a consistent level of ordering from them - to the point where they've just started ordering the MG4. So, we're not just getting on choice lists, we're transacting."
Pigounakis is quick to point out that Issac and himself have had the conversation about choice lists before in previous roles. He says: "We don't get too excited about being on choice lists - because by the time you get to year end and look at the cars you've sold, then all of sudden the celebrations can die out pretty quickly.
Isaac has found that badge snobbery goes out of the window when it comes to their EVs, or even their Plug-in Hybrids. He says: "We are winning business from drivers of prestige brands, who are transferring out to a plug-in or a full EV - because of the tax benefits, obviously.
"I think more and more, if you have north of £30,000 to spend on a company car, there was traditionally three badges and they were German brands. Now, particularly with electric cars, we're starting to see a lot of business wins and it is where this badge snobbery has gone away."
"One thing that is helping our position, particularly with MG4 and MG5, is residual values, that's something that hasn't happened over night, we as a team have worked over the last two and a half years with the industry guides. We have been completely transparent with them, telling them exactly where we're going, I share on a regular basis our used car sale achievement - so they can see we're achieving more than the values they've set on our cars and we're selling those to the dealer network, and they're selling on to their customers."
According to Issac, in terms of fleet alone, the total EV mix, excluding rental is 36.1%. He says: "In that, the leasing EV mix is 57.7%. Which is well ahead of retail.
"We're not having to force registrations, or anything like that. We have a great relationship with most of the major leasing companies, if not all of them. What I've never experienced in my career, is that we've got the top 10 leasing companies talking to us and talking about volume commitments and not so they can distress the car through broker channels. They want to commit to buying MG product for their corporate customers and they're coming to us!
"We are doing daily rental, but it's all on buy back, we've got three major partners that we deal with and that's it. We don't engage with anyone else. With rental we have a fixed percentage of our total volume down the rental channel and that will be it.
"If you look at the fleet volume for this year, compared to the total volume of the business, it's running between 42 and 45%. I think we'll probably stay about that until the end of the year. It is generally between 45 and 50%."
Isaac tells me MG's fleet focus for this year and next as well, will be on leasing company engagement and public sector. "This is because in those two sectors, we felt there was a massive opportunity for us because of the product we've got. I've always found that if you focus on something, you can make a change. So, that's what the team has done this year and we've got lots of business because of it.
"When you look at the RV management, these are cars going for long three-year cycles, they're coming back as genuine used cars.
"There will continue to be pockets of business, such as the hail and ride sector with MG5. We will continue to add to that.
The leasing sector has such a massive audience, both private and public sector, hopefully we will be successful with our application to join the CCS (Crown Commercial Service platform), because that became available again. We've done business in the public sector, but we've not been on the CCS platform.
When we get on the CCS platform, then we can specially target with MG4 and MG5, as an area of growth for us."
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