The company didn’t comment when asked about the prospect of an alliance with JSW Group. ET reported in its June 14 edition that a private company owned by Sajjan Jindal, chairman of JSW Group, aims to buy a stake of as much as 48% in MG Motor India.
Talks between SAIC, the parent of MG Motor India Pvt Ltd, and one of the potential Indian investors are likely to conclude in a few months, said another senior executive. “We are in negotiations with several (potential) partners. We will close the talks as soon as possible – may be in two months,” the executive told ET, without specifying whether the company was close to finalising a deal with the JSW Group. “India is a very important market for SAIC and a unique one. (It needs the) right partner who can help the Chinese minds understand the Indian market,” he said, elaborating on the reasons for the delay in concluding the talks.
SAIC’s search for local partners to continue its car business in India comes as Chinese companies face increased scrutiny from the Indian government due to ongoing geopolitical tensions between New Delhi and Beijing following a deadly border clash in June 2020. India has since banned hundreds of Chinese apps besides imposing restrictions on foreign direct investments from the neighbouring country, making it more difficult for firms from there to invest in India. “We are looking at many different possibilities,” Hong said at Europe’s largest mobility show in Munich. “Everything is being considered. Our top priority is to see how we can benefit the Indian consumers,” Hong said, when asked about SAIC’s manufacturing presence in India. SAIC operates in India through British-origin brand MG, which sells five models including the Astor and Hector sport-utility vehicles, and ZS electric SUV in the country. The company has been in talks with investors, including JSW Group, for selling a majority stake to raise funds for the Indian operations. On its part, steel-to-cement JSW Group is keen to diversify into India’s nascent EV market. With its foreign direct investment proposal hitting the wall amid the heightened scrutiny on Chinese investments in India, MG Motor has been relying on external commercial borrowings from its parent company to continue its operations. SAIC is keen to scale up MG Motor’s operations in India, the executive cited earlier said.
“We have to ramp up the capacity and bring models that are a lot more suitable for the Indian market. They should have the same philosophy for the customers,” he said, adding that SAIC has more than four decades of experience in the automobile industry with robust technologies and a wide product range for the Indian market. MG Motor, which entered the Indian market in 2019, is looking to expand sales to 80,000-100,000 units this year, up from 48,000 units in 2022. It will finalise the new investors-cum-owners, who together would own more than 50% of the company within FY24, Rajeev Chaba, CEO emeritus, MG Motor India, had said at a media briefing in May.The journalist is in Munich to attend the IAA Mobility 2023 on the invitation of Skoda Auto Volkswagen India