“Our strategic collaboration with SAIC Motor aims to grow and transform the MG Motor operations in India with a focus on green mobility solutions,” the JSW Group’s Parth Jindal said in a media release. The announcement comes amid increased scrutiny by the Indian government on investments made by China amid border tensions.
JSW and SAIC Motor signed the deal in London on Thursday, according to a statement issued by the two sides. JSW will jointly run the automobile unit in the country with SAIC.
Green mobility
This will enable the maker of the Hector and Astor SUVs to expand local operations, besides giving the Indian conglomerate an entry into the rapidly growing electric vehicle segment in India. SAIC will continue to support the venture with advanced technology and products.
The shareholder agreement and the share purchase and subscription agreement were signed by SAIC president Wang Xiaoqiu and JSW Group’s Parth Jindal on Thursday.
ET was the first to report on the deal’s details on June 15. On October 5, ET was also the first to report that JSW Group will own 35-38% of the JV initially.
“Both partners shall work closely to bring in the best of innovation, in creating greener and smarter mobility products and services for our consumers,” Xiaoqiu said in a media release.
JSW is aiming to make a mark in “green mobility solutions”, Parth Jindal said in the statement.
“The joint venture paves the way for bringing world-class, technology-enabled futuristics suite of automobile products including the new generation of intelligent connected NEVs and ICE vehicles,” he said. “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.”
The joint venture will develop the electric vehicle ecosystem and seek a leadership position in this space. SAIC Motor and JSW Group aim to create strategic synergies by bringing together resources in the fields of automobiles and new technology. The joint venture also plans to undertake multiple new initiatives, including greater local sourcing, improving the charging infrastructure, expanding production capacity, and introducing a broader range of vehicles with a focus on green mobility.
In May, MG Motor India had said it was looking at diluting a majority stake in the company to Indian entities to fund its expansion plans in the country over the next five years. As part of its growth plan, MG Motor India said it planned to invest Rs 5,000 crore, part of which would be for establishing a second manufacturing facility in Gujarat. The new unit is intended to more than double the company’s installed capacity to a total 300,000 units, up from the current 120,000.
MG Motor India CEO Emeritus Rajeev Chaba had told ET previously that the intent was to “Indianise the operation” by diluting a majority stake to a local entity in the next “two-four years”.
The British-origin MG marque is owned by SAIC. The company had a good start in India with the launch of its first product, the Hector SUV, in 2019. However, plans to expand its footprint in the country hit a roadblock with the government putting the brakes on approvals for investments from China amid border tensions.
As per industry sources, the automaker had been waiting for government approvals for nearly two years and had to eventually explore alternate options to capitalise its expansion plans.