I think people are happy to pay the luxury car tax for a perceived "luxury car" of which MG clearly isn't no matter their aspirations.They need to squeeze down that pricing to £39,995 or sales are going to be poor. No one wants to be on the hook for that ludicrous tax burden.
I know it's a different segment of car but I'd rather buy the standard range IM5 which has every bit of kit imaginable and is below the £40k tax band.
I actually think that is an own goal by MG because I don't think there is any competition between the IM 5 and the S6 even just in looks.