No, MG is not a misspelling of the famous American car manufacturer GM, it's actually a British sports car brand that first started out in 1924. The MG actually stands for Morris Garages, a subsidiary of Morris Motors, an old British car maker. Morris Garages was at first a dealer of Morris cars in Oxford but pretty soon they began selling their own modified versions.
At first the cars MG made were Morris chassis with coaches made by Carbodies from Coventry. These models sold rather well which prompted the company to relocate to a bigger facility in order to keep up with demand. In 1928 they became big enough to separate themselves from the parent company and MG now became MG Car Company Limited. That year the first original MG car, the 18/80 appeared, which was no longer based on a modified Morris chassis.
In 1935 the company was sold by William Morris to Morris Motors which in turn was owned by the Nuffield Organisation. What this meant for the company was a new venture into racing. Further change of management came in 1952 when the British Motor Company (BMC) incorporated the smaller MG. It is as this point that the company's history gets hazy. In an effort to cut costs, the MG factory was closed down, a fact that caused unexpected uproar amongst workers but also customers.
The MGB was launched in 1962 and it was a departure from the old lines of the MGA. Modern and more comfortable than its predecessor, it was produced with added upgrades until 1980. Between 1967 and 1969 the GMC series was produced but its large size and poor handling meant that it wasn't a favorite with customers.
When BMC was turned over to the Rover group in 1986, MG went under the ownership of British Aerospace in 1988 and later, in 1994, of BMW. This wasn't going to last long as in 2000, the Germans sold it back to the British, with Rover claiming the victory. They became the MG Rover Group and based their operations in Longbridge, Birmingham.
During the Rover Group period, MG sold rebadged Austin saloons like the Metro, Maestro and the Montego. Also, the two-seater MG RV8 series was revived in 1992, along a whole new series, the MGF (1995). This was the first mass-produced car since the 80s when production had been ceased.
After BMW sold MG, new models appeared such as the MG ZR, the Rover 25 and MG ZS. By 2005 production on Rovers and rebadged MG models ceased and there was a rumor that the Chinese, Nanjing Automobile Group to be specific, were interested in purchasing the British brand. By July of that year, Nanjing had already bought the rights to the MG name and the assets it came with for 53 million pounds.
The Longbridge plant would continue to produce the TF model, while a new plant in China would take care of the MG 7 model. Also, a new facility in Ardmore, Oklahoma would take care of the world production of TFs. a new generation of the sports car was announced in 2006 which should come out in 2008. The MG3, MG 5 and the MG 7 have also received some upgrades.