SAIC says MG European plant ‘will lead to higher costs’

The growing sales threat presented by Chinese automakers in Europe has seen industry bodies call for higher tariffs on imports to offset some of the competitive disadvantages European carmakers face locally, including higher energy prices.

Wang however said SAIC’s decision to build locally was not a political one. “We are businesspeople. We do not think too much about the political dimension,” he said.

The announcement from SAIC that it will build a European site will be a relief to European automakers, who will feel that they can compete on cost if the Chinese company has a factory in a European country.

MG has partly grown so fast because of its competitive prices, especially on the MG4, which starts at 28,590 euros in Germany compared to 39,995 euros for the Volkswagen ID3 with similar specifications.

Ford’s head of passenger car division in Europe, Martin Sander, recently told Automotive News Europe that he was not worried about competition from China in Europe as Ford moves to selling only electric vehicles in Europe.

“I am strongly convinced the moment the Chinese want to scale in Europe, they will also produce locally. And then I do not see why we should not be competitive with any other company,” he said.

Looking for factory site

SAIC will make a decision on where to locate the plant within two or three years, Wang said. Which country is still under evaluation, he said. “We need to check energy costs, labor costs … everything to find out which country is best. We need a very detailed calculation,” Wang said.

The U.K., MG’s biggest European market, is one option, Wang confirmed. SAIC still owns the Longbridge, Birmingham, plant that was part of the original MG Rover sale in 2005, initially to Nanjing Automotive and subsequently to SAIC. However, the assembly areas were leveled in 2021 as part of a plan to redevelop the site for housing.