After two years on cruise control, has decided to shift gears MG

With new investment and new policies, the 4th biggest auto company of Pakistan is ready to turn over a new leaf

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If there is one thing that the recent Russia-Ukraine war has shown us, it is that the crude oil market is not one to be relied upon. As soon as the first rocket touched the landmass of Kyiv, the oil market shot up, foreseeing a rise in demand and a shortage in supply given Russia’s exit from the market on international sanctions.

This is not the first time this has happened, and it is definitely not the last time it is happening. In fact, the rise in price was nothing compared to the OPEC crisis of the early 70s. One thing that has changed since the 70s however, is the reliance of the world on fossil fuels and crude oil. Technology has taken the world to a point where petrol and diesel cars are becoming almost obsolete. Alternative energy vehicles are not only being encouraged but also incentivised in some parts of the world.

Sadly Pakistan is at a point where electric vehicles, unlike other countries, are not as prevalent. But not for long as the 4th largest assembler of cars in Pakistan has decided to put forth its step in local assembly of Plug-in Hybrid vehicles (PHEVs) and fully electric vehicles.

Background and history

Around 4 years ago the Pakistani car market was a completely oligopolistic one. 3 companies reigned supreme while it was difficult for others to enter. Newer models were scarce and innovation was completely absent.

Come 2019 newer players started entering the market but the situation did not change much. Then in 2021, came Morris Garages, (MG), with its all new MG HS. As it entered the Pakistani market. The sleek, powerful and elegant compact SUV, took the Pakistani market by a storm and within a year it could be seen everywhere on the roads.

But what is MG?

Founded by William Morris and Cecil Kimber, in 1924, MG quickly gained renown for crafting high-performance sports cars. It began with the iconic MG M-Type in the late 1920s, setting records and winning races, marking MG’s early breakthrough.

MG’s zenith arrived in the 1930s with the T-Series models – TA, TB, TC, and TD. These roadsters embodied speed and style, earning global admiration. The MG T-Series became a quintessential symbol of driving pleasure and to this day are revered as a masterpiece of engineering.

Through the ‘60s and ‘70s, MG’s ownership changed hands, aligning with corporations like British Motor Corporation. The MG MGB emerged as a best-seller, defining the era’s sports cars.

MG’s 21st-century revival began in the hands of SAIC Motor in 2007. Models like the MG3, MG ZS, and MG GS merged technology and design while honouring MG’s performance heritage.

With a history spanning almost a century, MG’s journey is an inspiring narrative of passion and engineering prowess. As MG makes its mark in Pakistan, it brings with it a legacy that reshaped the automotive landscape, infusing modernity with a storied heritage. MG Pakistan’s vehicles not only drive roads; they drive the legacy forward into a future of automotive excellence.

Available Cars

While the global arsenal of MG has a number of cars, its Pakistan subsidiary is not far behind. Not only has MG broken the age-old tradition of introducing older versions in Pakistan but it has also made sure that its current portfolio is diverse in terms of fuel usage and drive efficiency.

While only having 4 cars out in the market, MG covers the full spectrum of different fuels that are used to drive cars.

After the successful run of MG HS (Essence) throughout 2021 and 2022, its other petrol C-SUV MG ZS has also come out amongst high hopes. But these are not all.

Come 2023 MG has introduced MG HS P-HEV and MG ZS EV into the market making it the first Pakistani brand to introduce P-HEVS in the market.

An explanation of alternative fuel vehicles

We all know what EVs are capable of. Synonymous to a cell phone its battery packs store charge the electric motor inside the car operates tha tyres, bypassing any fuel emissions.

But what are Hybrid Electrical Vehicles and Plug-in Hybrid Vehicles?

A hybrid is a car that’s both efficient and eco-friendly. These vehicles combine a traditional gasoline engine with an electric motor, creating a dynamic duo that works together seamlessly. When you start your HEV, it pri- marily runs on the gasoline engine. But as you drive at slower speeds or when you come to a stop, the electric motor takes over, providing a boost and conserving fuel.

The magic lies in the way these two power sources collaborate. The gasoline engine charges the battery that powers the electric motor, and the electric motor assists the gasoline engine during acceleration. The result is improved fuel efficiency and reduced emissions, making HEVs an excellent choice for city driving and stop-and-go traffic.

Similar to HEVs, PHEVs feature both a gasoline engine and an electric motor. However, the real star here is the larger battery that can be charged externally.

PHEVs are like chameleons – they can operate in different modes depending on your needs. When fully charged, they can run purely on electricity for a certain distance, often referred to as an “all-electric range.” This feature is a game-changer for daily commutes, as you can potentially complete your trips without using a drop of gasoline. But, what’s even more exciting is that when the battery is depleted, the gasoline engine automatically kicks in, extending the driving range. This flexibility makes PHEVs ideal for both short trips and longer journeys.

How PHEV Engines Operate: The engine operation in PHEVs is a dance of efficiency. When you start your PHEV, it generally runs in all-electric mode if there’s enough charge. The electric motor powers the vehicle silently and without emissions. As you accelerate, the electric motor provides instant torque, giving you a smooth and responsive driving experience.

Now, when you’re driving beyond the all-electric range or need more power, the gasoline engine takes over. But here’s the interesting part: the gasoline engine doesn’t directly power the wheels. Instead, it acts as a generator, producing electricity that charges the battery or directly powers the electric motor. This setup ensures that even when the gasoline engine is running, the wheels are still being driven by the electric motor, reducing overall fuel consumption and emissions.

In essence, PHEVs are the bridge between the world of gasoline and electricity. They offer the convenience of charging at home, emission-free city driving on battery power, and the reassurance of extended range with the gasoline engine. This versatility makes PHEVs an attractive option for those looking to reduce their carbon footprint while maintaining the flexibility of gasoline power.

Plant and Facilities

Other players in Pakistan’s auto market are also making moves towards hybrid technology. Sazgar Engineering has introduced the first locally assembled hybrid Haval 6, while Indus Motor Company (IMC) is set to launch the Toyota Cross with hybrid capabilities. Furthermore, Honda Atlas Cars Limited recently revealed plans to introduce hybrid vehicles to the Pakistani market. However MG is the first to actually materialise its plans of HEV and PHEV assembly inside Pakistan.

Currently the 4th biggest assembly unit of Morris Garages worldwide, MG’s facility in Lahore called the JW SEZ Auto Park, is capable of producing at least 2000 cars every month. However, due to recent supply chain disruptions these numbers have been much lower.

Talking to Profit, a spokesperson of the company ensured that not only are the MG HS Essence units being assembled as CKDs (Completely Knocked Down) in Pakistan but the after sales and service network ensures the availability of parts all across Pakistan.

MG’s Vision

The spokesperson shared insights with Profit during a recent tour of the company’s assembly plant in Lahore. He revealed that MG is charting a course to introduce locally assembled Plug-in Hybrid Electric Vehicles (PHEVs) by 2024, marking an investment of approximately 50 million Chinese yuan, equivalent to around $7 million.

The spokesperson highlighted MG’s anticipation of the Pakistani government’s formulation of a policy that favours electric vehicles (EVs). He emphasised that MG, with robust policy backing, could play a pivotal role in steering Pakistan toward embracing new energy vehicles (NEVs), ultimately contributing to a reduction in the nation’s fuel import expenses. He acknowledged that MG’s expansion plans for EV production hinge on favourable policy support and assured that the current manufacturing facility in Lahore’s JW SEZ Auto Park boasts sufficient space to accommodate this envisioned growth.

It is important to note here that currently the indigenous production of EVs has not begun. And because of import restrictions posed by the government, CBU units of MG’s PHEVs have made their way to the roads rather slowly. Once the inflow of CBU units is reinstated, the company plans on localising the assembly process.

The company spokesperson advocated strongly against Pakistan trailing in EV adoption. He cited instances like Turkey’s Togg and Saudi Arabia’s Ceer, the pioneer electric vehicle brands in their respective countries, as examples of forward-thinking strides.

Clarifying the company’s position on hybrid electric vehicles, he said that these vehicles receive more advantageous treatment in terms of general sales tax compared to electric vehicles – 8.5 percent for HEVs versus 25 percent for EVs. He pointed out that this anomaly is unique to Pakistan, resulting in higher prices for EVs, primarily due to batteries constituting the costliest component of NEVs.

Plans for the Future

MG’s aspirations extend beyond hybrids. The brand plans to diversify its portfolio by introducing the 1,600cc MG GT sedan, aiming to tap into Pakistan’s sedan market, which MG indicated holds a substantial 45 percent market share.

In pursuit of competitiveness, MG’s strategy entails localised production of high-value components and exploration of potential export avenues. Economic challenges, such as high interest rates and currency depreciation, have led MG’s production to be limited to 400 units of SUVs per month, compared to a capacity of around 2,100. However, despite these challenges, the spokesperson underscored the company’s optimism about Pakistan’s automotive potential and affirmed that no staff member has been laid off since the company’s inception in 2021, with the current employee count reaching 400.

With majority shareholder Shanghai Motor International Limited demonstrating longterm commitment to the Pakistani market, MG Pakistan’s presence signifies a substantial $100 million investment, positioning it as the fourth knock-down (KD) plant in MG’s global network.

Company’s senior management has stressed that Pakistan’s automotive sector must foster global partnerships to manufacture high-value and high-tech auto parts, ultimately transforming into a significant player in the international vehicle export market.

MG is confident that as the shift towards EVs gains momentum, infrastructure development will eventually align with this transformative shift in mobility preferences. Afterall, the future is here now and the longer we wait to adopt, the farther behind we will remain. The example of MG’s adoption of alternative energy is one that not only puts competition into thinking but will make profitable gains for the company. All while remaining cognizant of the environmental challenges that are faced by our world. n