In March 2015, MG Philippines president Morgan Say texted me to announce the entry of the British automotive brand MG into our market. Say also happened to be the head of White Knight Automobiles, the local importer and seller of another marque from the UK, Morgan (the businessman’s serendipitous namesake). At the time, I wondered whether this was good news for either MG or the Philippine distributor, as the latter’s short track record with Morgan wasn’t very promising (one only had to visit the EDSA-Greenhills showroom to arrive at this conclusion).
Who could blame me? It did look like the people behind the local distributor didn’t know what they were doing. Remember that one time they plagiarized an entire article from Top Gear Philippines and distributed the material to the media as the official press release of their launch event?
Long story short, the team managed to bring in MG, very quietly introducing such models as the 3, the 5, the 360, the GT, the GS and (very recently) the ZS. At the beginning of this year, MG Philippines became somewhat controversial on social media after insisting that its brand was “only for the young.” In a post on its Facebook page, the company said: “If you’re 40 and above, please buy other brands.”
My first thought was: “Wow. Only a distributor that’s about to sever ties with its brand would do this.”
Sure enough, the latest news is that the MG brand will now be transferred to the care of The Covenant Car Company, Inc. Yep, that’s the same firm that handles Chevrolet in our market. Starting October 1st, MG will officially be under TCCCI, which will then become a two-brand operation.
I was able to speak to a reliable source who is familiar with the development. My first question was: What is the business logic behind TCCCI picking up the MG brand?
My source, who spoke on the condition of anonymity, said: “TCCCI received an invitation to meet with the representatives of MG Global to explore the possibility of distributing their products in the Philippines. After evaluating the business potential of the brand, TCCCI saw how MG could complement its overall business strategy and growth plans. So MG is now the latest addition to TCCCI’s stable. With the addition of MG, TCCCI remains honored to provide the motoring public with options that serve their automotive preferences and personal requirements.”
It is important to note that General Motors’ partner in China—the Chinese automaker SAIC (Shanghai Automotive Industry Corporation)—is the present owner of MG (which explains the China-assembled MG models sold here). According to my source, however, GM and MG “operate independently of one another.” Even so, it’s hard to imagine GM not having signed off on the TCCCI-MG deal.
What is the business logic behind TCCCI picking up the MG brand? And what happens to the former distributor?
Next question: What happens to the former distributor, and why is MG abandoning this partner?
“TCCCI is not privy to discussions related to the former distributor of MG in the country, and is unable to comment on the matter,” my source replied.
When I asked MG Philippines’ Morgan Say the same query, he sent me this statement: “We warmly welcome the takeover of the new group that will carry MG into the future here in the country. We look forward to passing on the torch to TCCCI to continue the brand’s legacy in the Philippines. We are truly grateful for the privilege of being able to take part in the history of the brand.”
Were they bought out, or was this a simple case of terminating the distributorship contract?
“It was a friendly agreement among parties,” Say told me. “The details of which are subject to nondisclosure.”
Back to my other source: Will MG be directly under TCCCI? Or will a new organization be created for the brand?
“MG Philippines will be managed by TCCCI and its board. Likewise, experienced TCCCI management officers will also oversee the brand. However, an independent operational team will be established to focus solely on the MG brand.”
What about plans for MG’s dealer network (which was the primary weakness of the outgoing distributor)?
“Independent dealer partners will construct and establish MG showrooms nationwide. The first phase of the dealer network plan will cover Metro Manila, regional Luzon, the Visayas and Mindanao. All are expected to be completed by the first semester of 2019. To address any after-sales service concerns the motoring public may have while the dealer network is being established, independent service outlets and mobile service caravans will be accredited and designated by TCCCI, and made easily accessible.”
Our informant added: “Exciting sales pop-up stores and roadshows are already scheduled for the fourth quarter of 2018, so the public can have a close encounter with all the exciting, new MG products.”
And these new MG products are which ones exactly?
“MG Philippines is set to introduce three new products during its official brand launch event on October 11,” my source concluded.
This time, there’s good reason to be hopeful about the future of MG in the Philippines. It’s not going to be easy, but the new partnership has a decent shot at success. Knowing the professional guys at the helm of TCCCI, I’m 100% confident that the British-Chinese brand will now be in much more capable hands.
UPDATE: We tweaked the eighth paragraph to reflect GM’s business relationship with SAIC.