With an aim to support MG Motor's development and expansion in the Indian market, SAIC Motor and the JSW Group have joined forces in a strategic joint venture. The Shareholder Agreement and Share Purchase & Share Subscription agreement were signed at the MG Office in London by Parth Jindal of JSW Group and Wang Xiaoqiu, President of SAIC. Through measures including strengthening local sourcing, upgrading the infrastructure for charging, boosting production capacity, and launching a larger range of models geared towards green mobility, this partnership intends to bring together resources in automobiles and new technologies. The Chinese auto major had earlier said that it intended to lower its ownership in its Indian subsidiary to provide domestic firms the opportunity to acquire a majority share. Let's now take a closer look at what this collaboration has to offer to Indian car buyers.
The Joint Venture
JSW Group will own a 35 per cent stake in the Indian JV operations, as per the signed deal. To provide mobility solutions with an emphasis on Indian consumers, SAIC Motor will continue to assist the joint venture with cutting-edge technology and products. Furthermore, the joint venture is supposed to highlight SAIC Motor's technological know-how and experience in the automobile industry to highlight MG's four spiritual pillars: digitalisation, globalisation, rejuvenation, and young attitude. Additionally, it will make use of the JSW Group's extensive reach throughout the Indian economy's B2B and B2C sectors to strengthen local sourcing and build a reliable supply chain.
SAIC Motor, JSW Group Comment on the Alliance
Sharing his thoughts on the occasion, Wang Xiaoqiu, President, of SAIC Motor said, "The automobile business is a global industry, and like in any other similar industry, access and collaboration are crucial for its healthy growth. SAIC has always adhered to the 'win-win cooperation' approach while steadily improving our core capabilities and expanding our scale of production and sales. In the growing Indian automotive market, both partners shall work closely to bring in the best of innovation, in creating greener and smarter mobility products and services for our consumers, seizing market opportunities, continuously expanding the brand influence and market share of our products, and achieving greater success for MG in India."
Parth Jindal, Managing Director, JSW Group remarked, “Our strategic collaboration with SAIC Motor aims to grow & transform the MG Motor operations in India with a focus on green mobility solutions. The joint venture paves the way for bringing a world-class technology-enabled futuristic suite of automobile products including the new generation of intelligent connected NEVs and ICE vehicles. The JV’s focus on broader localisation initiatives will yield financially accretive synergies through economies of scale while providing the highest level of customer service to the Indian consumer. 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. The rich history of the MG brand is known to all and its success in India is there for all to see and it is truly an honour to be able to take this brand and company forward alongside a strong global partner in SAIC. We cannot wait to get going.”
MG Motor India Model Lineup and Production Capacity
With the launch of its retail business in 2019, MG Motor India currently offers five different models. The Hector SUV was released in 2019; the ZS EV and the Gloster SUV marked their India debut in 2020; the Astor SUV was launched in 2021; and the Comet EV went on sale in the domestic market this year.
Meanwhile, the brand previously disclosed that it would raise Rs 5,000 crore to establish a second facility in Gujarat, increasing the company's yearly production capacity to 3 lakh units. The maker plans to enhance production capacity at MG's Halol, Gujarat, factory from 70,000 units to 1.2 lakh units by the end of FY2024.
To bolster its ambitions for alternative fuel technologies, the manufacturer also indicated that it will look into the potential of forming a joint venture to produce hydrogen fuel-cell powertrains, EV parts, and local cell manufacturing. The carmaker hopes to introduce up to five new models under its 3.0 programme by 2028, with the majority being battery-electric cars. Moreover, the company predicts that in the next five years, between 65 and 75 per cent of its sales in India will come from electric vehicles.