Manufacturing News

MG, Great Wall plan to use SUVs to challenge in Europe

Chinese automakers hope to revive their European sales ambitions by targeting the region's booming SUV market.

China-owned brands MG Motor and Borgward plan to launch SUVs in Europe soon to attract buyers who have shunned Chinese vehicles because of quality issues. Great Wall Motor Co., China's biggest SUV maker, has reorganized production at its Bulgaria factory to focus on SUV production.

Sales by Chinese brands in Europe have remained stubbornly low since Zhejiang Geely Holding Group Co. used the 2005 Frankfurt auto show to announce plans to make a big impact in Europe.

MG Motor, owned by China's SAIC Motor Corp., sold just 2,328 MG-branded cars last year in the United Kingdom, its only European market, according to market researcher JATO Dynamics.

Next year, MG Motor will launch the GS compact SUV in the United Kingdom, where it is based. That will expand its lineup to three vehicles alongside the MG6 compact sedan and MG3 subcompact hatchback.

The MG GS may prompt the brand to sell in mainland Europe, a plan it postponed in 2013. Matthew Cheyne, MG Motor's sales and marketing chief, said: "A three-car lineup is a much more attractive package." Cheyne named Portugal and Cyprus as two countries MG intends to target in 2017 and 2018.

Paul Holmes, MG Motor's regional operations director, said the SUV will be an aspirational model that will make customers think differently about the brand. MG Motor, of Longbridge, central England, is all that remains of the MG Rover Group, which was the U.K.'s biggest volume automaker until its collapse in 2005.

Great Wall is counting on the H6 SUV to improve its European sales. The automaker has started building the H6 alongside the Steed pickup, replacing the C10 subcompact hatchback, at the factory it opened in Bulgaria in 2012.

"We are focusing on developing and producing 4x4 vehicles," a Great Wall spokesperson said. Great Wall sold 518 vehicles in Italy and 800 in Bulgaria, Serbia, Macedonia and Romania in 2014. The company is considering expanding into the Czech Republic, Poland and Greece.

Qoros Automotive Co., the partnership between China's Chery Automobile Co. and Singapore-based Kenon Holdings, may sell its upcoming Qoros 3 City SUV in Europe after ending sales of its Qoros 3 compact car in Slovakia, its European test market. Asked in March at the Geneva auto show whether Qoros will bring the SUV to Europe, company CEO Phil Murtaugh said the brand needed "more models in future."

Borgward, a revered German brand that is being revived with backing from Chinese truckmaker Beiqi Foton, plans to launch an SUV next year.

Christoph Stuermer, global lead analyst for PwC Autofacts, said no Chinese automaker will succeed in Europe without a fundamental change in vehicle design.

"Qoros is the epitome of boring," he said. "If you want to make a splash in Europe you need to come up with something that turns heads. They should dare to do something the others don't."

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