MG Motor is reacting to the price reduction for the VW ID.3 in China and has lowered the price of its competitor model MG Mulan (MG4 in Europe). For the time being, until the end of July, Chinese customers will receive a discount of 24 000 yuan (± €3 000) for the compact electric car.

This brings the starting price of the MG Mulan down to 115 800 yuan, some €14 500. After the latest price reduction, the low-priced VW ID.3 costs about 10 000 yuan more (at 125 888 yuan). In addition, customers of the MG Mulan get further incentives such as zero percent financing, a charger worth 4 000 yuan, and a “lifetime warranty on core components” worth 9 000 yuan.

Only in July?

MG Motor’s July promotion equates to a 17 % discount on the purchase price alone. Even though the promotion was only announced on 12 July (probably in reaction to the VW offer), the discounts apply to all customers who buy or already bought an MG Mulan between 1 and 31 July.

At Volkswagen, too, the price reduction for the ID.3 has only been valid in July. However, an extension or a further reduction beyond that is likely because of the fierce price war that broke out for electric cars in China.

Popular MG4

According to the manufacturer, the MG Mulan, marketed as MG4 outside China, was the best-selling electric model of Chinese brands in Europe from January to May. The MG4 was registered around 23 100 times in Europe during this period, while the VW ID.3 came in at just under 28 000 registrations. Also, in Europe, the price battle with Chinese manufacturers seems to start.

And the ‘agreement’?

The price action at SAIC’s MG brand is also interesting because SAIC was one of the signatories of the CAAM agreement. The China Association of Automobile Manufacturers (CAAM) issued a declaration on 6 July with 16 carmakers, in which the latter pledged “not to disturb the order of fair competition in the market by charging abnormal prices”. However, this declaration was withdrawn by the CAAM two days later, incompatible with China’s Anti-Monopoly Law principles.