Chinese auto major SAIC Motor has divested a 51% stake in its subsidiary MG Motor India to Indian investors led by the steel to paints conglomerate JSW Group.
JSW Group Chairman Sajjan Jindal on Wednesday announced the joint venture with SAIC making the group’s entry into the automobile space.
The JV company is known as JSW MG Motor India Private Ltd. and JSW group has picked up a 35% stake. Other investors include Indian financial institutions with 8% stake, the employees of MG India with 5% and MG India’s dealers with a 3% stake.
Rajeev Chaba, CEO Emeritus, MG Motor India said that the investors will put in more than ₹5,000 crore into the company and the capital will be deployed for capacity expansion from 1 lakh units per annum to 3 lakh units among others.
Sajjan Jindal, Chairman, JSW Group said making cars was his childhood passion. “I built my first car when I was 12 and was going around the factory. The idea of making cars in India remained in my head and when we learnt that MG India is looking for a partner we grabbed it.”
He said since the company wanted to make New Energy Vehicles (NEV) it decided to partner with SAIC, which has the NEV technology and MG which is a 100 years old British brand.
Stating that the JSW would disrupt the Indian automotive sector, Mr. Jindal said that the JSW MG joint venture will come out with a new car every 3 to 6 months.
While the focus will be on NEVs, the entity will continue to produce ICE vehicles. To begin with emphasis will be provided on plug-in hybrid vehicles, he said adding the company will have premium vehicles in its portfolio as well.
“We believe in scale and we will disrupt the market. In this year two new vehicles will be introduced. We will do deep localization and we want to create a Maruti moment in NEVs segment,” he said referring to the automobile revolution ushered in by Maruti Udyog in the 80s pushing Ambassador and Fiat to oblivion.
The new joint venture with its existing plant in Halol, Gujarat will capitalise on the significant opportunities emerging in the fast-evolving Indian automotive sector.
The JV company will be headed by a chairman who will be from the JSW group. The name is yet to be announced. The board will report to the steering committee and the board representation is yet to be announced.
Parth Jindal, Member of Steering Committee of JSW MG Motor India said, “The JSW MG Motor India joint venture is a momentous joint venture. It is the coming together of two giants in SAIC and JSW.”
“By leveraging the legacy of a world renowned British brand, cutting edge MG technology and JSW’s local manufacturing knowledge and acumen, I have no doubt that JSW MG will make world leading products in India for India and the world,” he said.
“It is our goal to be the leading auto OEM in the NEV segment in India and we will be working tirelessly to bring the best available technology into India so that we can give the Indian consumer what they truly want which is world class cars at affordable prices,” he added.
“MG India 1.0 has had a very good 5 years and it is now up to the joint venture to make MG 2.0 even more impactful and successful,” he further said.
Rajeev Chaba, CEO Emeritus of MG Motor India, said, “In JSW Group, we have found an ideal local partner to continue the growth story of the MG brand in India.”
“In less than five years, Team MG India has established a rock-solid foundation–a testament to our commitment to innovation, diversity, community service and robust customer care. Today, we are among the fastest-growing OEMs in the country,” he said.
“This foundation empowers us to embark on a new chapter, MG 2.0, and the joint venture marks a pivotal step in this journey. We will offer a range of vehicles from ICE to NEVs, staying focused on building a robust and sustainable EV ecosystem in India,” he added.
“We are firmly committed to expanding our manufacturing footprint with extensive localization by leveraging JSW Group’s extensive knowledge and expertise in manufacturing at scale,” he further said.
JSW MG Motor India will focus on strengthening its research, development, and technical prowess by setting up an R&D centre to cater to the different choices of car buyers. The new R&D centre will develop connected, new-age and local mobility solutions, giving automobile customers better access to advanced technologies and futuristic products with attractive value propositions.
By 2030, the company aims to take leadership position in the NEV category with an extensive product portfolio comprising New Energy Vehicles.
JSW Group’s ₹40,000 crore investment plan in Odisha is independent of this joint venture. Going forward, the JV company may set up a manufacturing base in Odisha where JSW would set up a battery manufacturing unit and units for manufacturing electric commercial vehicles.
