Seeking to distance itself from its Chinese origins and have a clear future road map, MG Motor India has announced it will hand over a majority stake in the company to Indian suitors. As part of the strategic 5-year ‘MG 3.0’ plan, the carmaker – a wholly-owned subsidiary of China’s Shanghai Automotive Industry Corporation (SAIC Motor) – is in discussions with a number of Indian entities, including strategic investors and corporates, to dilute its shares. By 2028, MG Motor India aims to have an Indian entity as its majority stakeholder, and the first step in share dilution is expected to be announced later in 2023.
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MG estimates EVs will make up 65-75 per cent of its India sales by 2028.
As it seeks suitors, MG has also said it will seek to raise funds to the tune of Rs 5,000 crore. These funds will be utilised to set up a second plant in Gujarat, which will help increase total production capacity to 3 lakh units annually. MG’s facility in Halol, Gujarat, presently has a production capacity of 70,000 units, which the manufacturer will scale up to 1.2 lakh units by the end of FY2024. MG hasn’t disclosed names of the firms it is in talks with for share dilution. In April, MG was linked with the Sajjan Jindal-led JSW Group, but the rumours were refuted by the conglomerate shortly after.
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With the process to have greater Indian involvement already underway at the carmaker, Managing Director and President Rajeev Chaba has been redesignated as CEO Emeritus. Chief Commercial Officer Gaurav Gupta has now been elevated to the position of Deputy MD, and will oversee day-to-day operations of the company alongside erstwhile Chief Operations Officer Biju Balendran.
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MG’s investments have been on hold for the last few years, as Indo-China relations soured following a series of clashes at the India-China border since 2020. With intense scrutiny on any foreign direct investment (FDI) proposals emerging from China, MG’s plans have essentially been put on ice. This is the reason why a number of Chinese carmakers, including Great Wall Motors, took a U-turn on their India launch plans despite having analysed the market and charted out a business plan in the last few years.
MG will launch up to five new models by 2028, most of which will be battery-powered.
With one or several Indian investors taking control of MG Motor India with majority stake, future investments are likely to be approved without any major hiccups. This will be crucial for the brand to continue its India innings, as its long-term plans, at present, are clouded with uncertainty given the frosty ties between India and China.
In a bid to strengthen its plans for alternative fuel technologies, the company has confirmed it will also explore the possibility of forging a joint venture for local cell manufacturing, production of EV parts and even hydrogen fuel-cell powertrains. Notably, MG had showcased the Euniq 7 hydrogen fuel-cell MPV at the Auto Expo, earlier this year.
Under the 3.0 programme, MG will launch up to five new models by 2028, ‘most’ of which will be battery electric vehicles. The carmaker estimates electric vehicles will make up anywhere between 65 to 75 per cent of its total sales in India in the next five years. MG is second in India’s electric four-wheeler market today, thanks to the success of the ZS EV, and the brand recently expanded its EV line-up in India with the launch of the micro Comet EV.
