SAIC Motor Corporation, China’s largest automobile company with annual revenue of $100 billion, has announced plans to enter the Indian market, which is projected to be among the top three automobile markets in the world by 2020.
The company also announced the formation MG Motors India, a 100% subsidiary, for commencing its Indian operations. Production is slated in 2019.
The location of the manufacturing facility has not been finalised, but it was most likely to come up in western India. General Motor India’s closed down plant at Halol is one of the locations under consideration, analysts said. The Maharashtra government is negotiating with SAIC to start a greenfield plant at Aurangabad. The company said it would announce the product strategy later.
SAIC Motor said it would deliver environment-friendly mobility solutions in India under the “MG” (Morris Garages) brand in India. The MG brand originated as an iconic British Racing Sports Brand in 1924. SAIC acquired the MG brand and its businesses in 2008.
SAIC was likely to introduce electric cars in India which would compete with Mahindra & Mahindra. “The entry of SAIC Motors into India will intensify competition and existing players will have to defend their turf by reworking their strategy. There would be pressure on margins. The entry indicates that the India market is still attractive despite the exit of some players,” said Abdul Majeed, Partner & Automotive Leader, PwC.