JSW Group, led by Sajjan Jindal, is in advanced talks to acquire a substantial 48-49% stake in MG Motor India, a Chinese EV major. This potential collaboration could play a pivotal role in MG Motor’s strategic expansion plans within the Indian market, aiming to increase its production capacity to 300,000 units annually. The infusion of capital from the stake sale, expected to be at least Rs 5,000 crore, is earmarked for financing a second manufacturing plant in Gujarat’s Halol, where the existing plant is situated.
Rajeev Chaba, CEO Emeritus of MG Motor India, outlines the plan to diversify shareholding, with a majority held by Indian entities. The proposed second plant in Halol is projected to add an impressive capacity of 180,000 units per year to the current 120,000 units. This expansion is deemed essential in light of MG Motor India’s notable growth, having sold 48,866 passenger cars in FY23, marking a 21% increase from the previous year and more than double the units sold in FY20.
The funds generated from the stake sale will not only contribute to plant expansion but also facilitate the localization of the component ecosystem. Chaba emphasizes the importance of involving local investors and owners, which aligns with MG Motor’s broader strategy of localizing its technology. By 2024, the company aims to assemble batteries, a crucial component for electric vehicles, at the Halol plant. Furthermore, key components like cells, currently imported, will be manufactured in India through strategic joint ventures.
In essence, the potential collaboration between JSW Group and MG Motor India signifies a significant step towards indigenous ownership, expanded production capabilities, and a more localized approach to technology and component manufacturing in the dynamic Indian automotive market.