After a 15-year absence, the MG brand is returning to the Mexican market. However, anyone who might recall the name from the days when British sports cars were a common sight on North American roads may be in for a surprise.
Following the breakup of the Rover Group, MG was sold to China’s auto giant SAIC in 2007, and although its vehicles are still developed in the UK, they are no longer manufactured there. Now, as Chinese domestic manufacturers start to push beyond the country’s borders, MG is returning to Europe and Mexico – raising the question of whether the U.S. might be next.
The MG brand was sold in Mexico from 2003 to 2005, along with other Rover products through MG Rover Mexico, an importer that is part of Grupo Galeria, from Monterrey Mexico. At the time, Rover was owned by the Phoenix Group, which, in turn, had purchased it from BMW.
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Now MG returns to Mexico as an SAIC subsidiary with its own distribution network, which launches with six dealers this month and by the end of the year will have a total of 17 dealers in 11 Mexican states.
The relaunch will see it introduce an initial line-up of three models: one sedan and two crossovers. The MG5 sedan is 181 inches long, about the same as a Nissan Sentra. It’s powered by a 1.5-liter 4-cylinder engine putting out 113 hp and buyers get a choice of a manual 5-speed transmission or a CVT automatic.
The starting price is 245,900 pesos (about $11,544 considering an exchange rate of 21.30 pesos per $1) and its most well-equipped version costs 319,900 pesos (approximately $15,108).
The MG ZS is a “B” segment crossover which is 169 inches long and has a 1.5-liter 4-cylinder engine with 118 hp; it offers a 5-speed manual transmission or a 4-speed automatic. The base price is 285,900 pesos (about $13,422) and its top trim level sells for 378,900 pesos (about $17,788).
The third model MG will sell in Mexico is the HS crossover, which is 180 inches long. It is available in two trim levels, both with 4-cylinder turbo engines.
The most affordable version has a 1.5-liter turbo engine with 160 hp and a 7-speed automatic DCT and it sells for 488,900 pesos (approximately $22,953). The top trim level has a 2.0-liter turbo engine developing 226 hp and is mated to a 6-speed automatic DCT. Its retail price is 549,900 pesos (about $25,816).
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The current line-up of a sedan and two crossovers differs greatly from the models last sold in Mexico in 2005. Back then the MG family consisted of the TF 2-seater mid-engine sports convertible and the Rover 75 based MG ZT Sports sedan as well as the Rover 25 based MG ZR hatchback, with either three or five doors.
Another difference is the brand positioning, previously MG was an entry level Premium Vehicle brand with a sporty flair. Now it will be a value-oriented brand.
MG vehicles will have the “Lucky 7” coverage consisting of a 7-year powertrain Warranty and Roadside Assistance. Also, the First seven maintenance intervals will be complimentary.
MG has the goal of achieving a 1.5% market share in Mexico during its first year and will gradually expand its line-up to include what, in Mexico, are known as MPVs, as well as new luxury models.
It’s unclear if the long-term plans might bring to Mexico the all-electric products MG is developing under SAIC. In June it signaled plans to begin selling the E-motion coupe in Britain. The two-door debuted at the 2017 Shanghai Motor Show. The Mexican market has been slow to embrace electric vehicles, however, due to cost and the lack of a broad charging infrastructure.
With a foothold in the North American market the question is whether SAIC might try to relaunch the MG brand in the U.S., where it has been absent for more than 30 years? The company has been hinting of that possibility since at least 2014 and even raised the possibility of setting up a U.S. production site in Oklahoma, a plan that fell through.
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With only a few exceptions, Chinese vehicles have not made it into the States – Volvo and Buick importing a small number of products from that country. But Chinese manufacturers are increasingly interested in export opportunities, according to Michael Dunne, founder of ZoZo Go consulting, and the possibility cannot be ruled out.
(Paul A. Eisenstein contributed to this report.)
The only ting in common with the original is the logo, and maybe the reliability.
SAIC should consider producing an MG with H2 fuel. HFS (Hydrogen Fueling Stations USA) is going to build HFS with the help of Longi. We are working with Hongbin Fang at Longi.com for electrolysers for our 350 production sites. SAIC could build the MG in China and export it to the USA. We will start with HFS production in Yuma, AZ and move East and then North to populate the US with H2 fueling stations.
Plans to connect HFS (Hydrogen Fueling Stations)
Start on Interstate 10 in Yuma, AZ #1 with first site. Then second site at intersection of I-10 and I-15 #2. From there customers can drive north to Phoenix or continue east to Tucson and El Paso.
Sites are placed 300 miles or less apart so passenger car drivers can refuel before running on empty. At #3 site, El Paso, drivers can go north on I-25 to Albuquerque #11. or east on I-10 to Kent, TX #4. There they can go north to Abilene, TX #5 or go east to Junction, TX #6 . From Junction on to San Antonio, TX #7. From San Antonio drivers can go north to Austin, TX #8, or north to Round Rock, TX #9 or from Austin east on I-10 to Houston, TX #10. Lafayette, LA # 12, Mobile, AL # 13, Tallahassee, FL # 14, Jacksonville, FL # 15, Gainesville, FL # 16, Tampa, FL # 17, Orlando, FL #18, Miami, FL # 19, Atlanta, GA #20 Nashville, TN # 21.
A different route from California East can be: Bull head City, AZ # 22, Phoenix, AZ # 23, Flagstaff, AZ # 24, Gallop, NM # 25, Santa Fe, NM # 26, Trinidad, CO # 27, Pueblo, CO # 28, Colorado Springs, CO # 29, Denver, CO # 30, Cheyenne, WY, # 31, Kearney, Ne # 32, Goodland, KS # 33, Salina, KS # 34, Kansas City, KS # 35.
A gallon of diesel is equivalent to one KG of H2.
A KG of H2 will power a passenger car 81 miles and most passenger cars have a 4 KG fuel tank so they can go 324 miles per fill up. Big Class 8 Truck Tractors, hauling heavy loads with truck, trailer and loan not exceeding 80,000 pounds will get 6 miles to the KG. Sine their fuel tanks are 100 KG they, loaded, can go 600 miles between fueling. The same Class 8 loaded truck with diesel engines only get 3 miles per gallon of diesel.
We have to make sure both passenger vehicles and big rigs have sufficient fuel to continuing their drive.
Our goal is to provide HFS to refuel Class 8 big rigs but also to provide fueling for passenger cars.
Our HFS should have 12 fueling islands with H15 and H30 H2 pumps to refuel vehicles. Seven islands would be for Class 8 big rigs with loaded trailers in tow and five islands for passenger vehicles. Each HFS should be able to produce 10,000 KG of H2 per 24 hours and each HFS should have storage for H2 in the amount of 30,000 KGs.
Our trademarked brand H2 America, will charge $7.00 per KG plus state and local taxes per KG. This national pricing will make H2 affordable for both passenger vehicle owners and operators and also for commercial trucking companies that have switched to H2 vs Electricity.
There are 4.06 million Class 8 heavy duty trucks in the USA as of 2021.
How are we to proceed? We will franchise the HFS with Franchisees gross profit of approximately $5.00 per KG of H2 sold. Per KG of H2 the cost of municipal water and electricity should not exceed $1.25. The difference between the cost of water and electricity and $1.50 goes to HFS franchisee for operating expense and taxes. There are two $.25 deductions from the $7.00 national average retail price that the franchisee collects. The first is for the franchise contractor and the second is for the franchise company Hydrogen Fueling Stations USA (HFS USA).
The franchise contractor, to be named, will get $.25 per KG sold.
The to be named franchise contractor will get $.25 per KG, up to 10,000 per day, times 365 day or approximately $900,000 which is the amount for one year. The same goes for the franchise owner, HFS USA.
At 10,000 KGs produced per day, times 10 HFS the franchise contractor gets approximately $5,000,000 total over time.
The opportunity for the franchise contractor is that the individual franchisee pays for the land, construction, equipment and permits.
Starting out at a site next to the California border and moving east on I-10 will allow passenger H 2 vehicles in California to drive east and have locally available fuel. Then in short order once more than several HFS are up and running, freight haulers will start using the new H2 sites along the Interstates to deliver their cargo on H2 fuel. We would like to have the Interstates across the country set up with HFS so that Class 8 shippers can go from coast to coast on H2. Initially passenger vehicles will use the new H2 enhanced interstate highways, as California has three auto makers, Honda, Toyota and Hyundai leasing H2 passenger vehicles in California. These are the passenger vehicles that will drive east when H2 is available. Our retail fuel price will be approximately half the California prices. Currently there are 12,000 H2 passenger cars in California.
Currently Nicola is providing H2 Truck Tractors to haul containers at Long Beach to warehouses in the Orange Empire. When our HFS are up and running in the adjacent states, major Class 8 truck builders will start producing and selling H2 fueled Truck Tractors that will ply the new H2 enhanced interstates.
Our HFS will require a one-third acre of land, commercial quantities of municipal water and electricity and the equipment to make and store H2 refrigerated and under pressure.
It will take approximately six months for each HFS to attract sufficient customers per day to operate at maximum revenue. From the seventh month through the eighteenth month, the HFS should be selling most if not all of its H2. With Truck Tractors taking 100 KGs of H2 per fill the facility will easily help the franchisee pay the mortgage and operating expenses plus leave a significant cash revenue. At 10,000 KG s per day produced and with an approximate $5.00 gross profit per KG, the franchisee should gross approximately $18,250,000 ( 10,000 KG per day X 365 days, times $5.00 gross profit per KG). Class 8 Truck Tractors have 100 KG fuel tanks so 10,000 KG production per day, would fuel 100 Truck Tractors if that number stopped for fuel. Passenger vehicles only require 4 KG per fill.
Our HFS have twelve fueling islands each with 5 H-15 and 5 H-30 pumps. Seven of the islands are for Class 8 Truck Tractors and five are for passenger vehicles.
Corporate Office: Las Vegas
Zone One Manager: AZ, NM, CO, NV and TX. Manger will drive to and or fly to each HFS check out operation, ads, local car dealerships to let them know H2 is locally available, etc. No Graffiti on building, no readers on pumps, etc. Review and report weekly sales per HFS.
Zone Two Manager: Fl, GA, AL, MS, LA, OK, TN, SC, NC, VA and KY
Zone Three Manager: IN, OH, WVA, PA, NY, MD, NJ, CN, DE, RI, NH, MA, VT and ME
Zone Four Manager: WA, OR, ID, WY, MT, ND, SD, MN, WI, MI, IL, IA, KS, NE and MO
Based on Manager’s home state, several additional states will be covered by car, the rest by air.
Each Manager will review and report on each HFS via computer and e-mail. Company car provided. Air Fare and hotel plus per Diem provided.
Zone One Home Office: Phoenix
Zone Two Home Office: Atlanta
Zone Three Home Office: Pittsburgh
Zone Four Home Office: Billings
I
The MG brand in the USA as a Hydrogen Electric car would be very desirable and will sell very well. Possibly SAIC would invest in the HFS as it will build trust with the other investors and they will start to franchise additional HFS sites.
Once the initial HFS (Hydrogen Fueling Stations) are operational for more than six months, then the HFS are a cash cow for investors.
Why? Lets go through the numbers.
1. The franchisee investor has 20% down or approximately $2 MM.
2. The investor gets a construction loan with 6.5% interest or $8 MM X 6.5% = $520,000/year interest.
3. Per site, it will take six months for the site to be operating at 80% on average, but then….
4. The site will generate 80% of 10,000 KGs of customers per day.
5. $5.00 per KG, the gross profit per KG of H2 X 8,000 = $40,000/day.
6. $40,000 X 365 = $14,600,000 per year.
7. $14,600,000 less the investor’s 20% down and $520,000 interest is $12,080,000 gross revenue.
8. Investor can out of gross revenue, franchise a 2nd HFS site.
9. As new revenues from the 2nd site come in, he can franchise the 3rd site, etc.
10. Over time each site will achieve 100% utilization by H2 buying customers.
So the investor has significant gross profits from each HFS which is why we say it is a Cash Cow.
Let me know.
Best regards,
Steve Kovacs
President
Hydrogen Fueling Stations USA
sfkovacs02@comcast.net
720-401-6644