SAIC motor explores Indian partnership for auto market growth

08 Sep 2023 CW Team

A senior executive from SAIC indicated that discussions between SAIC, the parent company of MG Motor India, and potential Indian investors are expected to reach a conclusion within the next few months. The executive stated, "We are currently in negotiations with several potential partners and aim to finalise these discussions as soon as possible, possibly within two months." However, they did not specify whether a deal with the JSW Group was nearing completion. The executive emphasised the importance of finding the right partner who can assist SAIC in understanding the unique Indian market, which has contributed to the delay in finalising the talks.

SAIC's search for local partners in India comes at a time when Chinese companies are facing increased scrutiny from the Indian government due to ongoing geopolitical tensions following a border clash in June 2020. India has imposed restrictions on foreign direct investments from China and banned numerous Chinese apps, making it more challenging for Chinese firms to invest in India. Chen Hong stated, "We are exploring various possibilities, and everything is under consideration. Our primary focus is on how we can benefit Indian consumers." When asked about SAIC's manufacturing presence in India, he emphasised the importance of scaling up operations.

SAIC currently operates in India under the British-origin brand MG, which offers various models, including the Astor, Hector sport-utility vehicles, and ZS electric SUV. The company has been in discussions with potential investors, including the JSW Group, with the aim of selling a majority stake to raise funds for its Indian operations. Meanwhile, JSW Group, primarily known for steel and cement, is interested in diversifying into India's emerging electric vehicle (EV) market.

Due to increased scrutiny, MG Motor has relied on external commercial borrowings from its parent company to sustain its operations in India. SAIC is committed to expanding MG Motor's operations in India, with a focus on increasing production capacity and offering models better suited to the Indian market. The executive noted that SAIC has over four decades of experience in the automobile industry, advanced technologies, and a wide range of products tailored for the Indian market.

MG Motor, which entered the Indian market in 2019, has ambitious plans to boost sales to 80,000-100,000 units in the current year, up from 48,000 units in 2022. The company aims to finalise new investors who will collectively own more than 50% of the company by the end of FY24, according to Rajeev Chaba, CEO emeritus of MG Motor India, as announced during a media briefing in May.

Chen Hong, the chairman of China's largest automaker, SAIC Motor Corp, has revealed that the company is exploring various options for partnering with an Indian firm to expand its presence in the rapidly growing automobile market. When questioned about the possibility of an alliance with the JSW Group, SAIC did not provide a comment. However, according to an article, a private company owned by Sajjan Jindal, the chairman of JSW Group, expressed interest in acquiring a stake of up to 48% in MG Motor India, a subsidiary of SAIC. A senior executive from SAIC indicated that discussions between SAIC, the parent company of MG Motor India, and potential Indian investors are expected to reach a conclusion within the next few months. The executive stated, We are currently in negotiations with several potential partners and aim to finalise these discussions as soon as possible, possibly within two months. However, they did not specify whether a deal with the JSW Group was nearing completion. The executive emphasised the importance of finding the right partner who can assist SAIC in understanding the unique Indian market, which has contributed to the delay in finalising the talks. SAIC's search for local partners in India comes at a time when Chinese companies are facing increased scrutiny from the Indian government due to ongoing geopolitical tensions following a border clash in June 2020. India has imposed restrictions on foreign direct investments from China and banned numerous Chinese apps, making it more challenging for Chinese firms to invest in India. Chen Hong stated, We are exploring various possibilities, and everything is under consideration. Our primary focus is on how we can benefit Indian consumers. When asked about SAIC's manufacturing presence in India, he emphasised the importance of scaling up operations. SAIC currently operates in India under the British-origin brand MG, which offers various models, including the Astor, Hector sport-utility vehicles, and ZS electric SUV. The company has been in discussions with potential investors, including the JSW Group, with the aim of selling a majority stake to raise funds for its Indian operations. Meanwhile, JSW Group, primarily known for steel and cement, is interested in diversifying into India's emerging electric vehicle (EV) market. Due to increased scrutiny, MG Motor has relied on external commercial borrowings from its parent company to sustain its operations in India. SAIC is committed to expanding MG Motor's operations in India, with a focus on increasing production capacity and offering models better suited to the Indian market. The executive noted that SAIC has over four decades of experience in the automobile industry, advanced technologies, and a wide range of products tailored for the Indian market. MG Motor, which entered the Indian market in 2019, has ambitious plans to boost sales to 80,000-100,000 units in the current year, up from 48,000 units in 2022. The company aims to finalise new investors who will collectively own more than 50% of the company by the end of FY24, according to Rajeev Chaba, CEO emeritus of MG Motor India, as announced during a media briefing in May.

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