MG Motor India to introduce Indian investors to create favourable conditions: China’s SAIC

MG Motor India plans to introduce investors including JSW Ventures Singapore through an equity transfer and by increasing share capital, said China’s SAIC Motor Corp. JSW Ventures will buy an aggregate 35 per cent stake in MG Motor India for $429.4 million. 

"As MG Motor India aims to continue to increase MG brand's market share in India and effectively prevent operating risks, the unit plans to introduce local Indian investors to create more favorable conditions for sustainable and healthy development," SAIC said in a statement on Sunday.

IndoEdge India Fund will buy 8 per cent of MG Motor India for Rs 818 crore, a dealer trust will take a 3 per cent stake for Rs 307 crore, while an employee stock ownership plan will take 5 per cent stake for Rs 511 crore. 

In November last year, SAIC Motor and JSW Group announced a strategic joint venture with the latter securing 35 per cent stake in MG Motor India. SAIC Motor announced plans to reduce its ownership in MG Motor India, allowing domestic entities to hold a majority state. 

The JV would work to develop the EV ecosystem and aims to take a leadership position in the domain. The companies said that the collaboration would focus on local sourcing, charging infrastructure improvement, production capacity expansion, and the introduction of a wider range of vehicles prioritising green mobility. 

The JV, named JSW MG Motor India, is eyeing a new car every 3-6 months. Their focus, they said last month, would be new energy vehicles or NEVs.

“We want to launch one electric vehicle every 3-4 companies in the next months. The idea is to create a Maruti moment," Sajjan Jindal, Chairman, JSW Group had said.

The company is eyeing 33 per cent of the electric vehicle market by the end of the decade. Parth Jindal said that with the support of the government, EVs will follow a similar transition as seen in China. He said in order for India to improve the high account deficit on account of oil imports, and for it to become truly “atmanirbhar” (self-reliant), electric vehicles are the way to go.

(With Reuters inputs)