MG Cars got its name from Morris Garages, a dealer of Morris cars in Oxford which began producing its own customised versions to the designs of Cecil Kimber who had joined the company as its Sales Manager in 1921 and was promoted to General Manager in 1922. Kimber remained as General Manager until 1941 when he fell out with Lord Nuffield over procuring wartime work. Kimber died in 1945 in a freak railway accident.

There is some debate over when MG started. The company itself stated it to be 1924[citation needed], although the first cars bore both Morris and MG badges and a reference to MG with the octagon badge appears in an Oxford newspaper from November 1923. Others dispute this and believe that MG only properly began trading in 1925.

The first cars which were rebodied Morris models used coachwork from Carbodies of Coventry and were built in premises in Alfred Lane, Oxford. Demand soon caused a move to larger premises in Bainton Road in September 1925, sharing space with the Morris radiator works. Continuing expansion meant another move in 1927 to a separate factory in Edmund Road, Cowley, Oxford, near the main Morris factory and for the first time it was possible to include a production line. In 1928 the company had become large enough to warrant an identity separate from the original Morris Garages and the M.G. Car Company Limited was established in March of that year and in October for the first time a stand was taken at the London Motor Show. Space again soon ran out and a search for a permanent home led to the lease of part an old leather factory in Abingdon, Oxfordshire in 1929, gradually taking over more space until production ended there in 1980.