Is MG on Its Way Back to the US Market?

• Chinese-owned British automaker MG plans to build an assembly plant and R&D facility in Mexico.

• The facility is being designed to assemble 100,000 units annually in its initial phase.

• No other details on the facility—including exactly where it will be located—have yet been released.

The Chinese-owned British auto brand MG has announced it will build an assembly plant and a research and development facility in Mexico. Before you spend an hour on its configurator for its new Cyberster EV sports car, be aware that MG has no plans so far to import any new vehicles north of the border.

“This move will allow us not only to produce vehicles, but also generate market intelligence specifically designed for and by Latin America,” said Zhang Wei, president of MG Motor Mexico, as reported by Mexico News Daily August 8.

Before it could import its growing line of electric vehicles, MG’s owner, SAIC Motor of Shanghai, would have to source battery materials and parts in Mexico, the US, or Canada to meet the Biden administration’s requirements for EV tax credits.

Zhang gave no details on when or where the facilities would be built, or how much SAIC will spend on all of this, though Spanish-language El Economista has reported the factory will assemble 100,000 units annually in its initial phase (per the Mexico Daily News story). According to the report, SAIC is looking at central Mexico or the Bajio region for the facilities.

While it sells five EV models in the UK including the new Cyberster, it offers no EVs in Mexico. However, Reuters noted in a March 2023 article that Mexico “makes a lot of electric cars, but few Mexicans drive them,” chiefly due to purchase price and range anxiety.

What are the prospects for MG to return to the US?

“SAIC and BYD are expansion-minded automakers and must be looking into how to get access to the US market,” said Sam Fiorani, vice president for Global Vehicle Forecasting at AutoForecast Solutions, via email. He was addressing both MG’s Chinese parent and BYD, the Chinese giant that also has announced plans for a Mexican plant.

“A big part of that will need to be mineral and battery sourcing. They don’t have local assembly plants, yet, but bringing partners into the plan has to be part of the outline. Expect more Chinese suppliers to follow the groundbreaking of SAIC and BYD plants.”

Last May, as Chinese automakers were in the early stages of invading Western Europe with cheaply priced EVs, President Biden slapped a 100% tariff on Chinese-built electric vehicles, up from the Trump administration’s 25% tariff.

Biden already had stiff requirements regarding battery materials and manufacturing, and vehicle parts and assembly for EVs to be eligible for a tax credit of up to $7500.

Whether Vice President Harris or ex-President Trump prevails in the November 5 election, there are reasons to worry about a deluge of Chinese EVs in the US market.

China’s rapidly growing auto industry is quickly squeezing automakers like Volkswagen Group and General Motors in its home market. Manufacturers there have cost advantages from their ties to local governments and from China’s unique brand of government-controlled markets to help local automakers expand exportation.

That means Chinese automakers can flood foreign markets with cheaply priced EVs as US, European, South Korean, and Japanese automakers struggle to increase their EV sales in the face of much higher cost structures.

In March, the Financial Times reported that Chinese-built EVs are set to take 25% of the European market in 2024, and last week, Volkswagen announced a plan to close German factories for the first time in its 87-year history due to weak demand at home for its electric models.

In 2023, SAIC announced it would build a new factory in the UK to build MGs, though it did not indicate what models it would build there, the BBC reported. Founded as Morris Garages in 1924, MG is best-known in the US for sports cars that American GIs first brought home after World War II. Successors to the post-war TC and TD included the MGA, MGB, and Midget, which were about as popular in the American market as in Europe.

SAIC Motor acquired MG when it swallowed Nanjing Automobile Group in 2009. Nanjing acquired the MG and Rover (now Rowe) brands from the ashes of the MG Rover Group in 2006. SAIC’s MG launched the Cyberster two-seat drop-top in August, available only in EV form.

The Cyberster “is a world away from the MGB,” the UK’s Auto Express writes in its four out of five-star review of the EV. It’s “more GT than sports car … If you’re looking for an electric Mazda MX-5, the MG Cyberster isn’t it.”

In the UK, the MG Cyberster starts about $72,500 at current exchange rates, and Auto Express says it tested a top-spec model for $79,000. Paint color options include a “new English white,” but there is no green, British Racing, or otherwise. We can’t vouch for the electrics, but we are sure there are no oil leaks.

The rest of MG’s UK lineup consists of three EV crossovers and an EV wagon, with the MG4 XUV electric starting at $35,600, plus two hybrids, one plug-in hybrid, and three gas-powered models.

MG’s current Mexican market lineup consists of compact hatchbacks, sedans, XUVs, and a larger SUV, but no EVs, with prices ranging between approximately $12,060 and $40,210 based on current exchange rates.