MG to make decision on European factory in summer

Two people familiar with the matter reportedly mentioned the summer as a potential timeframe for an announcement to Automotive News Europe. MG is said to be looking for an undeveloped site rather than taking over an existing site, which several countries have offered.

The plant could have an initial capacity of 100,000 units per year and start production in 12 to 16 months after final project approval, which has not yet been granted. MG is also considering a second plant, which would also have a capacity of 100,000 units per year, and not an expansion of the first plant to 200,000 vehicles.

SAIC had already announced in 2023, well before the EU’s special tariffs, that it wanted to build the MG4 in Europe. At the time, there were no statements about a possible location, but the decision was to be made in the next two or three years. However, high-ranking managers made it clear in 2023 that production costs would be higher than in China and would therefore be a particular focus when choosing a location.

In the summer of 2024, northern Spain was named as the favourite, specifically the region of Galicia in the north-west of the country, due to the good shipping connections to the UK, which remains MG’s most important European market. Following the EU decision on the special tariffs, with SAIC affected by the highest tariff rate of 35.3 per cent, the Chinese government is said to have warned domestic manufacturers not to invest in those EU countries that voted in favour of introducing the special tariffs, including Spain.

Although the Automotive News Europe informants did not name any possible countries or regions, only Germany, Hungary, Slovakia, and Slovenia voted against the tariffs. With its high production costs, Germany is likely to find it difficult to win the bid. Hungary was already considered a possible candidate in the past, partly due to the subsidies available there and the successful establishment of several Chinese EV companies, from BYD to CATL and Eve Energy. However, SAIC is not directly a state-owned company under the ownership of the People’s Republic, but is under the control of Shanghai Province – and therefore under quite strong political influence.

In terms of unit sales, MG is one of the most successful Chinese car manufacturers in Europe, selling 243,395 electric cars, plug-in hybrids and full hybrids in Europe in 2024. However, the brand was only able to grow by 5.1 per cent, and not with fully electric cars: their share fell from 47 per cent in 2023 to just 30 per cent. A few weeks ago, MG surprisingly presented a new generation of its MG4 compact electric car, although its predecessor was only launched in 2022. With the MG S5 EV, a successor to the MG ZS EV is also in the starting blocks for Europe.

yahoo.com, autonews.com (paywall)