If there was one car brand that could exemplify economies of scale, good marketing, and good profitability, it would be Dacia. It was relaunched by the Renault group after taking over in 1999 and has since become the golden egg of the French manufacturer.
This is an eye-catching, no-nonsense car, the perfect choice for motorists looking for a good quality and affordable private means of transportation with low maintenance costs.
The success in terms of sales has also been attributed to the lack of direct competitors, at least in Europe, where last year Dacia sold 90 percent of global volume. Despite the obvious reasons for the car’s popularity, Dacia is still the only low-cost brand available on the continent. Neither Volkswagen nor the former PSA developed an autonomous brand to compete with the Romanian house. However, that could soon change. And challengers come from far away.
Rebirth (Asia) British Brand
MG is slowly becoming a major player in the European electric vehicle market. Leveraging its British origins, SAIC China, its current owner, is expanding its presence worldwide. It offers highly competitive products that include sedans, SUVs, and even hatchbacks and wagons. The goal is to offer affordable, attractive and modern electric cars.
And the formula paid off. Enrollments doubled in the first eight months of this year in Europe, totaling 58,300 units. This is a volume higher than that recorded by Honda or Mitsubishi and equal to 70 percent of that recorded by Suzuki. MG made it into the top 25 European brands, with the highest percentage increase.
It is important to note that MG is not yet available in all European countries (as of August it is still missing in Switzerland, Poland, Czech Republic, Portugal, Slovakia, Romania, Hungary, Estonia, Lithuania and Latvia). These markets together represent 13 percent of total European volume.
Key to Success? Electricity With Good Price
But while MG’s market share in the European market as a whole is still very low (0.82 percent through August), the company is in a more comfortable position in the pure power market. According to data provided by JATO, this market accounted for 2.6 percent of pure electric car registrations between January and August.
MG applies the same formula that has allowed the Dacia to outperform in recent years, but in the electric car market. The average price of its EV line is lower than most major brands in Europe. For example, the MG ZS EV, an electric B-SUV, is cheaper than its rivals Opel, Peugeot, and Hyundai.
The MG5, a C-segment electric wagon, is the most affordable option in this segment. The same goes for the MG Marvel R, MG’s flagship in Europe. The average retail price in Europe is 47,221 euros. Its direct rival has a price between 49,831 and 65,484 euros.
As a result, MG attacked the electric vehicle market that was emerging from below, just as Dacia did in the internal combustion engine market.
The author of the article, Felipe Munoz, is JATO dynamics Automotive Industry Specialist.