SAIC confirms UK is a possibility for new MG factory

The UK is in the running to host a new European plant for the Chinese-owned MG brand, the company’s regional head has told Autocar.

Parent company SAIC announced earlier this month it was looking at Europe to build a fourth production base outside of China.

“We’re investigating where is the best place to build,” William Wang, MG head in the UK and Europe, said at the sidelines of the Goodwood Festival of Speed. “The UK is one of the options.”

The UK is currently MG’s biggest market in Europe, with almost 40,000 cars sold there to the end of June, SMMT figures show. 

SAIC isn’t put off by the fact that the UK now sits outside the European Union, Wang said. “Even with Brexit, we still treat UK as part of Europe,” he told Autocar.

The UK has to prove itself as a cost-effective base to build cars against alternatives across Europe. “We need to check energy costs, labour costs… everything to find out which country is best. We need a very detailed calculation,” Wang said.

MG needs a European plant as sales reach the levels of established car makers. “When you sell 200,000 cars per year, it’s better to build local,” Wang said. 

The cost of building in Europe is likely to be higher than in China, where SAIC has established supply chains, including a joint venture with battery giant CATL. “I expect it to be more expensive to build local, but it’s time,” Wang said.

Higher build costs will be offset by the lack of the 10% import duty, reduced shipping costs and ability to react to customer demand for different specifications.

“If we make it here, we can make quick change. If we build in China, it’s at least three months later," Wang said. “There’s a lot of benefit you can’t really measure by a figure.” 

Other benefits include strong local ties to the region the brand is selling in, although Wang said it wasn’t a political decision. “We are normal business people. We don’t think too much about the political dimension,” he said.

MG would seek to build the MG 4 electric hatchback, Wang said. The MG 4 was the second best-selling electric car in the UK after the Tesla Model Y in the first six months of the year, with 10,829 sold. MG is the second best-selling EV manufacturer overall in the UK after Tesla so far this year, with 15,058 sales, beating Volkswagen.

A decision to build a site would be taken “as quick as possible”, Wang said, without giving a timeframe.

The company is investigating both greenfield and existing factory sites. One possibility in the UK could be to buy JLR’s Castle Bromwich site, which will cease making cars after the current range of Jaguar models ends production. Another option outside the UK is Ford’s Saarlouis site in Germany, which stops production of the Focus in 2025 and for which Ford is actively seeking a buyer.