MG 4 Price Cut Compensation – But There's a Catch

MG 4 owners who purchased their electric vehicle earlier in 2024, before the significant price cut in September, are being offered a form of compensation – but it's not what many may have expected. Rather than a cash refund or service perks, MG is offering these early adopters a discount on their next MG purchase, provided they trade in their current MG 4. Here’s what you need to know about this offer and the reactions it has sparked.

The Details of MG’s “Compensation” Offer

When MG slashed up to $10,000 from the price of its MG 4 electric cars on September 20, 2024, some customers who had recently purchased the vehicle felt blindsided. The price cuts saw the MG 4 Excite 51 drop from $40,000 to $30,990, and though it's since increased slightly, it remains up to $8425 cheaper than its pre-cut price.

For those who bought their MG 4 before the cuts, MG Motor Australia is now extending a discount on the purchase of a new MG – but only if they trade in their existing vehicle. The discount being offered is in line with the national fleet discount typically given to bulk-buying businesses, rather than a special compensation for these individual buyers.

The offer comes with some restrictions:

• Trade-In Requirement: The discount only applies if the customer trades in their MG 4.
• Non-Transferable: Customers cannot transfer the discount to a new MG purchase for a family member or friend.
• No Clarity on Expiry: MG has not confirmed if there is a time limit on when the discount can be used.

Customer Reaction: Disappointment and Frustration

For many customers, this offer feels far from adequate. After the price cut, early MG 4 buyers experienced an instant depreciation of their vehicle’s value. On social media, some owners expressed disappointment, feeling that the trade-in discount does not make up for the rapid devaluation of their car.

One customer commented, “This hardly feels like compensation … as trade price now after this heavy discount would make you go even more backwards.” Another shared their frustration, pointing out that with the value lost from the initial price cut, any new trade-in arrangement would require a substantial discount on a new MG to offset the loss – a scenario they found unlikely.

Why MG Stands By Its Decision

According to Giles Belcher, MG Motor Australia’s chief commercial officer, the brand stands by its decision to cut prices despite its impact on early buyers' resale values. In the days following the price adjustment, demand for the MG 4 reportedly surged by five times, with MG doubling its usual monthly sales in just ten days. Belcher described this response as "a very healthy run rate" and affirmed that the price cuts were ultimately the right move for the company.

“Resale value is difficult – you can only control what you can control,” Belcher explained. He emphasized that while pricing decisions do influence resale values, MG had to balance multiple factors, ultimately prioritizing market demand.

The Upshot: A Limited Opportunity, But at a Cost

For MG 4 owners impacted by the price cut, the trade-in discount may offer a path to recoup some value, but it comes at the price of selling their current car. Meanwhile, the MG 4 continues to be a popular choice, and its lower price point has attracted a new wave of customers looking for an affordable electric vehicle option.

While the price cut has positioned the MG 4 more competitively in the EV market, its handling of early buyers has raised questions. Only time will tell if this approach strengthens MG’s relationship with customers or leaves a lasting impression on its reputation.