NEW DELHI: After months of speculation, China’s largest automaker SAIC Motor and billionaire Sajjan Jindal-led JSW Group on Thursday announced forming a joint venture. As part of the JV agreement, the Jindals are picking up a 35% stake in MG Motor India.
This development is seen as a much-needed step to aid the growth of SAIC’s India unit (MG Motor). The maker of the Hector SUV has been struggling to raise funds for its future endeavours after the Indian government started scrutinising Chinese investments in the country.
Tension between India and China has remained at an elated level since troops of both sides clashed at the Galwan Valley in June 2020. Following this, India banned hundreds of Chinese apps and amended FDI rules to increase the screening of proposals made by countries that share a border.
Owing to this, China’s Great Wall Motor (GWM) pulled out from India and abandoned its $1 billion project. Other Chinese automakers such as Futon and Changan also pulled out from the Indian market. In May 2023, MG Motor said it is planning to sell a majority stake in its India operation to a local partner (or partners) in the next two-four years, according to its strategic five-year business.
According to JSW Group’s Parth Jindal, the strategic collaboration with SAIC Motor aims to grow & transform MG Motor operations in India with a focus on green mobility solutions. “One of the key focus areas of this joint venture will be to pursue the development of the EV ecosystem and to take a leadership position in this space.
We would like to thank SAIC and MG Motor for choosing JSW as their partners of choice and look forward to building one of India’s largest automobile companies together,” said Jindal. Wang Xiaoqiu, President of SAIC Motor, said, “Both partners shall work closely to bring in the best of innovation, in creating greener and smarter mobility products and services for our consumers.”