MG Motor bets on technology to consolidate its position in mid-size SUV segment

This will be the company's fourth offering in India, after SUVs like Hector, Gloster and the ZS electric vehicle.

The SAIC Motor Corp owned company is expected to launch its new product before Diwali and will try to compete with Korean manufacturers, Hyundai Motor India Ltd and Kia Motors India Ltd, who dominate this segment. 

According to Rajeev Chaba, president and managing director, MG Motor India, the management’s target was to pitch MG as an inspirational brand through products like Hector and ZS EV and subsequently launch a smaller SUV to generate volumes.

“We will be offering autonomous (driving) level-2 which is not present in any of the competing products in the segment. This will be a big differentiator in terms of safety and the AI intelligence feature will offer convenience to the customers. I think the young customers would prefer the Astor due to the differentiation that we are creating through technology," added Chaba.

Entry-level and mid-size SUVs have been gaining market share in the domestic market over the last five years as customer preference, especially in the urban markets, is shifting away from sedans and hatchbacks.

MG Motor will enter the midsize SUV segment when disruptions in the supply chain due to semi-conductor shortage have led to a reduction in production targets of automakers. The second wave of covid-19 has further dampened the customer sentiment though automakers are expecting decent sales during the upcoming festival season due to pent up demand and an increased shift towards personal mobility.

“On the demand side we don’t see any problem and this will only increase because of festivities coming up. Demand is high due to pent up demand, revenge buying and more travel within the country. Issue is the supply side due to shortage of chips and shipping is also very chaotic and situation has not improved at all," said Chaba.

He further added that this phase may last for six months to a year and after that market forces will play their game as capacity issues will be sorted by chipset manufacturers. MG intends to launch the Astor before Diwali but management will take a call on the date of launch after checking semi-conductor availability.

Most passenger vehicle manufacturers had low vehicle inventory at dealerships when production was stopped due to explosive rise in cases of covid-19. Hence, most of them started to ramp up production from June to fill up stocks before the festive season kicks in.