MG5 brings a new real estate experience to the BEV market

November 11, 2022

Autovista24 Senior Analyst Sonja Nehls and Autovista Group Market Analyst Dennis Borscheid discuss MG5’s remarketing prospects.

The new MG5 combines attractive price positioning with a decent amount of equipment and a mature design, in addition to its unique station wagon body style for a battery electric vehicle (BEV).

The Chinese-made competitor does not outperform its competitors in any particular aspect and falls behind in terms of power, consumption and battery life. However, its calm, composed flair, combined with an attractive price tag, might be just what an array of customers have been waiting for.

The first of its kind

The new MG5 has just been launched and is the first compact BEV station wagon to be offered in Europe. While SUVs have become the go-to body style, especially for families, station wagons are still popular with customers in many countries. Given their lower height and more aerodynamic silhouette than SUVs, they also offer efficiency benefits.

So the MG5 is a step ahead of the competition with a unique offering, but will that be put to good use?

Another potential benefit is the brand itself. Although considered an emerging player, MG can rely on a historical brand name, which helps to fuel the relevance and interest of potential buyers.

In the UK, the brand never really died out after the collapse of the MG Rover group in 2005. It remained operational under new ownership and was acquired by China’s biggest carmaker, SAIC Motor, in 2007.

MG5 remarketing potential

Take the wheel

The incredible acceleration offered by the BEVs is very exciting. But in everyday driving, that can get old fast, and the amount of torque isn’t necessarily a pleasant experience for passengers.

A standard version of the MG5 is available with an output of 130 kW/177 hp and a long range version offers 115 kW/156 hp. The model is therefore positioned as a rational car with sufficient power but clearly differentiates itself from high-performance BEVs.

Direct torque from the electric powertrain, however, allows drivers to pull away from traffic lights faster than the typical internal combustion engine (ICE) vehicle into the next lane.

The MG5 is on a mission to deliver everything expected of a BEV, such as direct acceleration and quiet travel. But it does away with all the shenanigans like Tesla’s wild acceleration, instead of just being a decent, rational travel companion.

Calm and collected

As the first compact BEV station wagon available, the selection of direct competitors is a little more difficult than for the many electric SUVs or SUV coupes to come. In this remarketing outlook, the MG5 is compared to the Kia e-Niro, Nissan Leaf and Skoda Enyaq.

Although not exactly comparable, the selection is a good indication of what potential customers can choose from. The Nissan Leaf represents the lower end of the spectrum in terms of size and price, while the Enyaq sits at the top.

The exterior design of the MG5 is remarkably unremarkable. It doesn’t turn heads and is instead a rather timeless and practical car. That could well pay off in used-car markets, as the MG5 avoids the risks of a love-it-or-hate-it design that appeals to a wide range of customers.

The interior is a little more quirky, for example using a blue colored line to give the impression of mood lighting and combining different materials (fabric, black and brushed metal-like hard plastic). Still, it doesn’t feel futuristic like the e-Niro or a bit outdated like the Leaf. It fits perfectly in the middle, offering a modern touch without trying too much to be trendy. Something used car buyers will likely appreciate.

Specifications and dimensions compared to main rivals

The MG5 has decent boot space, with up to 1,367 liters of capacity. However, there is no uniform loading threshold, which is very atypical for a station wagon and a missed opportunity.

Unlike the Nissan Leaf, the MG5 can mount a towbar and has a capacity of 500 kg. While the e-Niro and Enyaq can tow more, that’s enough for a small trailer. The front weight of 50 kg can support a bicycle rack and two to three bicycles, for example.

Interior space is generous even for tall people. The lack of convenient storage solutions, like a dedicated tray with built-in wireless charging for a smartphone, is a minor drawback.

Source: MG

Fairly fast charging

Range anxiety is less of an issue for BEVs these days, but charging efficiency and specs have taken center stage as important differentiators in the new and used car markets.

This could be a real danger for the MG5 on the second-hand market because its power consumption (17.9kWh/100km) and therefore its range (380km) are a little worse than its competitors.

In particular, the two SUVs in the comparison consume less electricity than the MG5. There’s certainly room for improvement here, especially given the cost consciousness of used-car buyers and rising energy prices. MG has the potential to take advantage of the aerodynamic benefits of the station wagon body style, but has so far failed to seize the opportunity.

Battery specifications compared to competitors

The charging specifications are in line with current expectations in this segment, especially given the price position of the MG5. It charges just as fast as the new e-Niro and faster than the Leaf, only losing out to the more expensive Enyaq.

Attractive prices combined with simple equipment

The price positioning of the new MG5 is attractive, being below its competitors. Looking at UK pricing, the MG5 ranks far below the three selected competitors.

For the Top Trophy version, the price difference compared to competing models with comparable versions is £6,050 against the e-Niro, £2,950 against the Leaf and £5,475 against the Enyaq. The standard equipment is roughly comparable between the models and the configuration is simple.

With only two trim lines and no additional options offered, the equipment structure of the MG5 is one of the simplest on the market. The customer chooses a color and trim and that’s it, easy. Therefore, the likelihood of poorly equipped cars hitting the market is non-existent as both trim lines are well equipped.

The homogeneity of cars generally guarantees eligibility to a large target audience and enables cross-border remarketing. However, with many vehicles available with almost the same configuration, transparency in the used car market is high and individual cars compete fiercely with each other.

Shake the Continent

MG has claimed a significant slice of the BEV pie in recent years, making it the most successful Chinese brand currently operating in the European BEV market. EV volumesthe Global Electric Vehicle (EV) Sales Database, reports that the brand sold 22,269 BEVs in Europe in 2021, up 68% from 2020. This volume places it as the 18th largest BEV brand most sold in Europe.

In the UK, MG even made it into the top 10 at number nine, surpassing Peugeot, Renault, Skoda and Fiat. An impressive fourth in Sweden would have been achieved thanks to extremely attractive rental rates and strong partnerships with local dealers.

Top 20 BEV sales in Europe by brand, 2021

Source: EV-volumes.com

MG has been successful in securing trusted and well-known dealers as sales and service partners, meaning the MG5 can build on an existing and growing network. The limited availability of new cars has also opened windows of opportunity with rent and leasing companies. MG was able to deliver cars when other manufacturers could not.

It’s a good starting point for new car sales, and it could also become critical for used car remarketing. Significant volumes could be absorbed on the new car market. However, this could also lead to oversupply in the used car market, which would hurt the residual value (RV) of the MG5.

MG5 RV forecast 36 months/60,000 km, November 2022

When looking at the national level %RVs of the MG5 it becomes clear that the model, as well as the brand as a whole, is well accepted in the UK, where it has by far the strongest %RVs in the big five countries.

Next come Italy and Spain with % of RVs in their 40s, while France and Germany show the lowest figures due to strong local competitors reducing the RV potential of the MG5.

MG5 RV forecast vs competitors, UK, 36 months/60,000km, November 2022

Looking at the UK and comparing it with major rivals, the %RV of the MG5 is among the lowest of the models analysed. Indeed, even though MG is more accepted in the UK than in the other big five markets and has a certain heritage, it is still seen as a new brand and faces corresponding challenges.

Used car customers are hesitant to spend a significant amount of money if they don’t have any information about the durability and reliability of the car in question. In this regard, established OEMs have it a little easier because customers know it and – for the most part – trust their vehicles to be reliable and well-made. The brands featured above are good examples of this trust as Kia and Nissan are among the brands with the longest history of BEV sales in Europe.

Skoda entered the BEV market a bit later but can pass on some of its good brand reputation (clever storage, good value for money) to its two BEV models, the Enyaq SUV and the Enyaq Coupe. Enyaq’s RVs are also supported by limited availability due to supply chain issues and resulting long delivery times.

This dynamic is observed across countries and segments and applies to both ICE and BEV models. MG is on its way to becoming an established brand, particularly in the UK, but it will take some time for this shift in customer perception to manifest in MG5 RVs.

Remarketing the insignificant

In conclusion, the MG5 eschews flashy design, says no to unnecessary power cuts, refrains from using expensive high-voltage charging, and the offering is simple. It delivers what’s expected, from decent space inside and in the trunk, to competitive charging times and a design that backs up its sensible appeal.

It offers everything you expect from a BEV station wagon – nothing more, nothing less – only slightly behind the competition in terms of fuel consumption and range. While there are some minor downsides with storage and startup accessibility, most customers will likely overlook it, due to the MG5’s attractive price positioning.

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