NEW DELHI: Billionaire Sajjan Jindal wants to disrupt India’s electric passenger vehicle (PV) industry by recreating the “Maruti moment” of the early 1980s.
His steel-to-port conglomerate JSW Group and China’s SAIC Motor on Wednesday finalised joint venture (JV) ‘JSW MG Motor India Pvt Ltd’. MG Motor is a legacy British brand owned by Shanghai-headquartered SAIC Motor.
As per the contours of the JV, the two parties will invest `5,000 crore to triple manufacturing capacity in the coming years, launch a new vehicle every 3-6 months and open premium retail outlet centres to take on over a dozen incumbent players, who have aggressive EV plans. The JV entity has set an initial target of selling 10 lakh EVs in India by 2030 to corner a third of the market.
“My dream with MG joint venture is to create a ‘Maruti moment’. In 1984, when Maruti came to India, it changed the auto industry. We aim to do the same with MG,” said Jindal, Chairman of JSW Group, at an event in Mumbai. He said it was his childhood dream to make cars and work for the same had started way back in 2015-16 but got delayed due to various reasons.
Parth Jindal, JSW Group Scion and Member of Steering Committee, JSW MG Motor India JV, explained JSW would be taking 35% of the JV entity while Indian financial institutions would be taking 8%. The dealers are buying 3% of the JV and 5% is kept for the employees. SIAC Motor will hold the remaining 49% stake. At a later stage, there is a possibility that SAIC may dilute its stake via initial public offering (IPO) or even the Jindals may increase their holding. The chairman of the JV will be with the JSW Group with the board would be managed by JSW and SAIC members.
Parth sees a big opportunity in the space and expects domestic PV industry to become as big as of China. “Indian economy at $4 trillion is where China was in 2005 and the US was in 1985...Last year China sold 25 million PVs and of this 8 million or 32% were new energy vehicle products. In contrast, India sold less than 2% or 80,000 EVs last year 2023,” said Parth. He said over the next 10 years, India will be a 10 million PV market.
The JV will launch two new products in the festive season of which one will be a “new energy vehicle” while the other is likely to be powered by gasoline. The JV is also betting big on plug-in hybrid vehicles (PHEVs) and they aim to launch one in 2025.
“We will offer a range of vehicles from ICE to NEVs, staying focused on building a robust and sustainable EV ecosystem in India. We are firmly committed to expanding our manufacturing footprint with extensive localisation by leveraging JSW Group’s extensive knowledge and expertise in manufacturing at scale,” said Rajeev Chaba, CEO Emeritus of MG Motor India.
After speculations, SAIC Motor and JSW Group on November 30 announced forming a joint venture. This development was seen as a much-needed step to aid the growth of MG Motor as it was struggling to raise funds for its future endeavours after India started scrutinising Chinese investments in the country.
Following this announcement, JSW Group in February signed a `40,000 crore MoU with the Odisha government to set up an Integrated EV and battery manufacturing project in the state. Parth said the investment in Odisha is made by JSW Group on a standalone basis. Owing to JSW prowess in the Steel business and the group’s effort to built an entire EV ecosystem in Odisha, the JV would have the headroom to price their EVs aggressively. Without revealing prices of their future products or a specific timeline, Parth Jindal said that they would like to bring down prices of new energy vehicles at the level of ICE power vehicles.