 "JSW group to buy 35% stake in joint venture with SAIC Motor of China")
The JSW group and SAIC Motor of China on Thursday signed a strategic joint venture (JV), with the Sajjan Jindal-led conglomerate holding a 35 per cent stake in the new entity. This marks the JSW group’s foray into the automobile sector -- a long-cherished dream of the 63-year-old billionaire.
A subsidiary of SAIC Motor, MG Motor India currently sells the MG Hector and Astor models of SUVs and the ZS and Comet models of electric vehicles.
In a statement, the JSW group and SAIC said the Chinese firm will continue to support the joint venture with advanced technology and products to deliver extraordinary mobility solutions with an unwavering focus on the Indian consumer.
The share purchase and share subscription agreement was signed by the president of SAIC, Wang Xiaoqiu, and JSW group’s Parth Jindal at MG Motor’s UK headquarters in London “with the objective of accelerating the transformation and growth of MG Motor in India”.
SAIC Motor and JSW group will create strategic synergies by bringing together resources in the field of automobiles and new technology, the statement said.
The JV will also undertake multiple new initiatives, including augmenting local sourcing, improving charging infrastructure, expansion of production capacity, and introducing a broader range of vehicles with a focus on green mobility at a time when American car major Tesla is also giving final touches to its India entry plans.
“We plan to grow and 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,” JSW group’s Parth Jindal said.
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One of the key focus areas of this JV will be to pursue the development of the EV ecosystem and to take a leadership position in this space. “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,” he said.
Xiaoqiu said: “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.”
The JV will leverage the presence of the JSW group across B2B and B2C sectors of the Indian economy to augment local sourcing and establish a robust supply chain. Together, SAIC and the JSW group will work towards creating a smart and sustainable automotive ecosystem in India by bolstering the development of NEVs and ICEs with carbon neutrality, sustainability and green mobility at the centre of its shared vision.
A JSW group official had earlier said the Indian automobile market is not a “winner takes it all” market and there is a lot of potential for new entrants in the electric vehicles market. “We believe that there is a space for an entrant like us. And we think being an EV first platform will be what will define us,” a group official said recently.
MG Motor’s Halol facility has capacity to make 120,000 vehicles and would require another site to expand and was looking at the Chennai plant owned by Ford Motors. MG Motor sold 48,866 vehicles in FY23, of this 11 per cent were electric cars.
Since the early 2000s, it has always been a dream of Sajjan Jindal to produce cars in India. The group had even set up a unit under electricity producer JSW Energy in 2017 to produce electric cars but had to abandon the plan after objections from shareholders.
On May 10 this year, MG Motor had announced plans to sell a majority stake to Indian investors, targeting a fundraise of over Rs 5,000 crore in the next two to four years. Company officials had said these funds would be used to build a second plant in Halol, Gujarat. This new unit will boost its annual capacity to about 300,000 units by 2028, Chief Executive Officer (CEO) Emeritus Rajeev Chaba had told reporters.
MG Motor India has so far invested Rs 4,000 crore in India. The company has 350 dealerships, which it plans to raise to 400 by the end of 2023.
MG Motor entered the Indian market in 2019, when it launched its first car, Hector, in June that year. The company is currently selling five models — Hector, Gloster, Astor, ZS EV, and Comet EV — in India.
(With inputs from Deepak Patel)