In the last few weeks, we’ve been checking and observing what will be happening with the arrival of SAIC Philippines. The company which represents the largest automobile group in China is setting up its office in BGC Taguig and joins the likes of Toyota, Mitsubishi, Suzuki, Isuzu, Nissan, Honda, and Hyundai as national sales companies that are fully or partially owned by the actual manufacturer or OEM.

While SAIC does manufacture four brands that are already in the Philippines which includes Volkswagen (under Ayala), Maxus (also under Ayala), and Wuling (which is under another group), it has been an open secret that the brand they are looking to work on is MG. Now, MG is currently being managed by The Covenant Car Company, Inc. (TCCCI) in the Philippine market, but that will change. And now they’ve officially confirmed it.

TCCCI executives are now announcing that their 5-year contract as the official MG importer and distributor in the Philippines is ending next month. Normally, such contracts get extended after some negotiations, but SAIC didn’t consider it.

A normal practice in the industry is also to enter negotiations to have some kind of joint venture agreement between the existing distributor and the OEM or new incoming distributor. That was (or still is) the case for NSCs like Nissan Philippines (NMPI and UMC still have part ownership) or how the Alvarez group still has stakes in the distributors of Peugeot (now under Astara) and BMW (now under SMC). It is a way of still having a stake in the brand, a seat on the board, and the proverbial foot in the door.

Atty. Albert Arcilla - TCCCI president and CEO

TCCI executives tell us that the idea of a joint venture wasn’t on the negotiating table either, and so the new company is a 100% direct foreign investment.

That was clear since the articles of incorporation filed by SAIC with the SEC for a new company called SAIC Motor Philippines is fully owned and controlled by SAIC. So that means that after July 2023, MG Philippines will be SAIC Motor Philippines.

Despite the changeover (not really takeover) at the corporate level, the consumer will not feel any negative effects when it comes to purchasing and ownership experience. For dealers, it will be business as usual, though they will be talking to different people compared to before. As we had previously reported, SAIC is busy interviewing and hiring experienced executives and personnel to fill key positions with the company.

And based on the previous experiences of brands that were turned over to the OEM, the options available in the model range will only get better for MG customers. SAIC did indicate in its articles of incorporation that they are looking at bringing new energy vehicles into the Philippine market.

TCCCI says there’s none in the way of bad blood or hard feelings over how all this played out, and that the transition will be peaceful. They will instead focus on Chevrolet, and expand the model line further. More news on that later on.