NEW DELHI: MG Motor 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 the company's strategic five-year business road map announced on Wednesday.
The British brand owned by China’s largest car maker Shanghai Automotive, is reportedly in talks with steel magnate Sajjan Jindal’s JSW Group to dilute stake. If the deal goes through will mark the entry of JSW in the passenger vehicle industry. MG is yet to share the names of potential partner or partners while JSW Group declined to comment on this.
The carmaker’s decision to rope in a local partner comes as more Chinese firms are struggling to obtain foreign direct investment (FDI) clearance from the Government of India for their future endeavours. 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 hundred 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.
The maker of the Hector and Astor SUV is also aiming to invest more than Rs 5,000 crore to expand its manufacturing capacity and have a total of 20,000 workforce by 2028.
The carmaker plans to establish a second manufacturing facility in Gujarat to increase its production output from the current 1,20,000 to 3,00,000 vehicles (including both plants’ capacity). The company intends to launch 4-5 new cars, mostly electric vehicle (EV) models, and achieve 65-75% of its sales from the EV portfolio by 2028. MG has plans to establish a battery assembly unit in Gujarat as well.
MG Motor had entered India in September 2017 by acquiring General Motors India’s Halol plant.