On the back of fresh funds and a local joint venture (JV) partner, MG Motor is gearing up to launch five new products in India over the next 12 months. The first new launch, to take place this festive season (September or October 2024), will be an electric crossover utility vehicle (CUV).
Three of the five upcoming launches are going to be in the mass market category while the rest two would cater to the premium market.
“We have five new products approved (by the JV) to be launched in the next one year. The first will be launched a few months from now in the festive period. It is going to be a CUV, a vehicle with huge space and SUV capability. It will be loaded with features,” said Rajeev Chaba, CEO emeritus, JSW MG Motor India.
Chaba added that now that the JV with JSW Group is formed, their target is to expand fast - increasing production capacity from 100,000 units to 300,000 units - in the next three to five years.
“As we speak, we are busy putting the second plant in Halol (Gujarat). We are going to increase capacity from 100K to 300K per annum. In the next three to five years, we should have 300k cars and when you have this capacity, you need to have the products to fill the plant. One of the biggest priorities of the JV was to get new products. I am happy to say we’ve got five new cars approved for launch in India,” said Chaba.
Billionaire Sajjan Jindal-led JSW Group and China’s largest carmaker - SAIC Motor (parent firm of MG Motor) – in March this year finalised automotive joint venture (JV) ‘JSW MG Motor India Pvt Ltd’. According to the contours of the JV, the two parties are investing 5,000 crore.
The JV is seen as a much-needed step to aid the growth of MG brand as it was struggling to raise funds for its future endeavours after India started scrutinising Chinese investments in the country.
MG’s product offensive is coming at a time when the local market is showing signs of fatigue. According to data from the Federation of Automobile Dealers Associations (FADA), passenger vehicle (PV) retail sales grew by only 2.53% to 920,047 units in Q1 FY25 from 897,361 units in Q1 FY24.
Chaba, however, expects the PV sales to clock 7-8% growth this year. “I firmly believe the fundamentals are strong…This quarter is going to be better than the previous quarter because of festivals and new launches. I still bet the industry can grow at 7-8% rather tables 2-3%,” he said. He is also upbeat about EV sales despite a slowdown in demand growth this year. Chaba expects EV sales to hit 120,000 mark this year from 90,000 last year.
Highlighting the existing hybrid cars sold in India are ‘mild’ and that they should now be clubbed with plug-in hybrids, Chaba said that incentives should be given only on strong plug-ins that can run as an independent EV, and not on vehicles where the battery is used only for improving fuel efficiency.
He also said that the current tax structure of PVs in India is outdated and needs to be updated with the new developments in the auto industry. He advocated that taxation should be based on environmental friendliness of the technology, impact on fuel import bills, localisation levels in terms of supply chain, and total cost of ownership.
Amidst stagnation in PV sales, Chaba cautioned about high inventory levels at dealer showrooms. “There is a bloodbath for dealers right now. Dealers are now the unhappiest people. At MG, dealer inventory is 35-40 days. In the industry, it has averaged around 60-65 days,” he said.