Formula for success: How MG Motor India is winning the luxury EV race

The premium car segment in India, currently at about 50,000 units annually, is growing at a faster Compound Annual Growth Rate (CAGR) than the rest of the passenger vehicle industry, indicating increasing consumer demand for premium vehicles. And MG Motor has cracked the code to consolidating its position in the segment.

The company's decision to focus on the niche premium electric vehicle (EV) segment, citing growing consumer income, a widespread trend of premiumization across various product categories, and the accelerated adoption of EVs within the premium car market in India, has driven sales into top gear and established MG as a market leader in the segment.

Anurag Mehrotra, Managing Director of MG India, spoke exclusively to Mathrubhumi All Things Auto's Senthil S Nair about the overall strategy of identifying where to play and how to win.

Why opt for MG Select?

There was a lot of thought that was given on what the future of the company would look like and we used the framework of where to play and how to win which is a very famous framework for defining the strategy of the company and in that we were clear that we identified segments where the opportunity to serve in the country was very good and it was kind of underserved so to speak. One of those segments that we identified was the premium car segment. The premium car segment today in India is at about 50,000 units a year and it is growing at a CAGR which is faster than the rest of the passenger vehicle industry which means Indians are consuming more and more premium cars.

We also looked at data of other product categories whether it is housing, whether it is financing, whether it is real estate, you are finding that more and more premiumization is taking place across product categories. The watches people are buying are more expensive, houses that they are buying are more expensive. So that was the second sort of piece of data that we looked at.

The third data that we looked at was the sheer earning potential of consumers in India. We were noticing that more and more people are getting into higher income groups. Last data we saw was the number of Indians who are paying taxes with an income of over a crore was growing at a clip rate of about 25 to 30 percent which tells you that in India today there is a high level of income that is taking place.

Second is the fact that premiumization of products is taking place across categories and the third trend was that the premium cars are growing at a faster rate. The final data that kind of really fascinated us was the fact that electrification in premium cars was at 2x the rate of volume cars which means that if the premium car penetration was at about 9 odd percent, normal cars were at about two and a half, three odd percent of EV penetration. So it tells you that there is the consumers are looking for premiumization, they're looking for premium cars and they're looking for electrified products.

So it became very clear to us that that is the space that we want to occupy which is premium cars and in new energy drive trains. Those were the two determinants. Once we decided where to play the question really was how to win and we believe and there were three or four elements to that strategy.

The first one was we were clear when we spoke to consumers that there were today four things that were not getting met from other premium brands in the country. The first was that they were looking for sophistication but sophistication not in terms of loudness of store, loudness of product or anything. They were looking for sophistication which is minimalistic.

Especially after COVID, you have realized that consumers are wanting less; less is more was becoming the theme. If you look at our own homes today, less is better is how people look at it. The second thing we noticed was technology was becoming prevalent in everything, everything that we do from the time we wake up to we sleep. I mean even health bands have started coming, even when you're sleeping. So technology has become completely ingrained in our everyday life.

The third trend that we noticed from consumers was that they were looking for, especially after COVID, they were looking for purpose in life, which means what am I going to do to the country, to the city, to the state, to the world as I'm living through it.

So sustainability became a big theme in the minds of consumers, especially in the premium segments. And the final piece was they were tired of everyday experiences being normal. You know, especially in the premium cars, there was very little in terms of differentiation in terms of the way I got treated as a consumer.

So we really focused on these four elements to say, we will give you sophistication, but it will be minimalistic, meaning less is more. Second, we will give you lots of technology, whether it is in the car or in the way we deal with you, technology will be the big piece. Third, we said that we will focus on new energy because sustainability is a big calling for a lot of consumers. And the fourth thing that we said, which will differentiate us in the marketplace was going to be curated experiences. Every customer will be treated uniquely. I think those were the four tenets around which we decided to build the brand.

And then, we also said we will go to market with a different channel. So the distribution network that we have set up is very different from the MG network. And the premise was essentially to deliver these four, we needed a different channel to go to market with.

Once we got that in place, then the third question was what products to bring. So it was after a lot of deliberation, we said the first set of products that we bring should be highly disruptive, which means as soon as you see them on the road, people should turn their heads and see what the product, what this product is. So we went in and spent a lot of time deciding on the first two products.

The first one that we chose was the Cyberster, which as you can see is the fastest. It's a convertible, it's super fast, 0 to 100 in 3.2 seconds. And the fact that it's got scissor doors, it's the fastest MG in the world. And we decided to then use that heritage of Cyberster to be able to bring a product that is very disruptive to look at.

The second one that we looked at was the MPV segment, because that segment was underserved, a lot of people are travelling a lot more. I mean, in Kerala only, you know, the number of people who are travelling between cities, Kottayam, Cochin, Thrissur; I mean, a lot of travel is taking place and people are spending a lot of time while travelling.

And therefore, they needed comfort. If I'm spending more time in the car, because I'm travelling longer distances, or I'm travelling a lot in terms of hours, then I need comfort in the car. And then we said, okay, this is the perfect product, because it's got fantastic, the best in class, length, width, height, it gives you great amount of space in the second row, as you can see, and it's layered with technology, right.

So all the brand elements were also kind of getting delivered through the product. So we decided on these two as the products on the basis of this approach.

How is the Electric Vehicle penetration in Kerala for MG?

I think given the policies from the state government and all the work that all Original Equipment Manufacturers (OEM) are doing, the EV penetration in Kerala is actually higher than the national average, which means people here are taking to new technologies, are early adopters of new technologies.

And second, we are thrilled because our market share in Kerala is higher than our national market share. And to us, that is a ratification of the value that the brand and the product is bringing to consumers. I am grateful to our partners, dealer partners, for driving the kind of engagement they do with consumers and very grateful for the response that we have got as a brand in the state of Kerala.

Are you expanding the MG Select network?

Depending on how the response comes, we will look at expanding it to further cities. So right now it's 14 stores in 13 cities -- Mumbai and Bengaluru have two stores. So we have 14 experience centres across 13 cities and 14 stores.