MG 2.0 seeks to create a ‘Maruti moment’
Vijay C Roy
Last week, the $23-billion JSW Group, having diverse interests in sectors such as steel, energy, infrastructure and cement, and SAIC Motor, a Fortune Global 500 company with annual revenues of around $110 billion, which owns and operates the MG Motor brand, formally announced their joint venture. It will produce both electric and internal combustion engine (ICE) passenger vehicles for the Indian as well as export markets. This is the first major India-China joint venture in the passenger car industry and would focus on creating a robust EV ecosystem with forward and backward integration of the supply chain. The new joint venture, JSW MG Motor India Pvt Ltd, will capitalise on the significant opportunities emerging in the Indian automotive sector.
The JSW Group will have a 35 per cent stake, Indian financial institutions 8 per cent, MG’s existing dealers 3 per cent and MG employees 5 per cent. The cumulative holding of Indian entities will be 51 per cent in the new company. SAIC will hold the balance 49 per cent stake. The company will see an initial investment of Rs 5,000 crore.
On the joint venture, Rajeev Chaba, CEO Emeritus of MG Motor India, said, “This foundation empowers us to embark on a new chapter, MG 2.0, and the joint venture marks a pivotal step in this journey. We will offer a range of vehicles from ICE to New Energy Vehicles (NEVs), staying focused on building a robust and sustainable EV ecosystem in India.”
MG Motor entered the Indian market in 2019 and has sold around 2 lakh units. It has invested close to Rs 7,000 crore so far.
The collaboration is likely to be a win-win situation for both the entities as well as Indian consumers, as the company’s business roadmap focuses on extensive localisation and development of a robust automotive ecosystem across the country. This will facilitate affordability.
With the joint venture in place, JSW Group seeks to create a ‘Maruti moment’ in the NEV segment. “Forty years back, when Maruti came to India, it changed the auto industry. It brought very efficient and lightweight cars and the Ambassadors and Fiats went into oblivion. Today, they are the market leader,” JSW Group chairman Sajjan Jindal said. “I believe that with MG, we can create NEVs’ Maruti moment,” he added.
The new entity of JSW and MG is expected to go aggressive in the passenger car market by driving in a series of new passenger vehicles that would include ICE vehicles, electric vehicles and plug-in hybrids (that run on both petrol engine and battery and fuel cells).
“By leveraging the legacy of a world-renowned British brand, cutting-edge MG technology and JSW’s local manufacturing knowledge and acumen, I have no doubt that JSW MG will make the world’s leading products in India for India and the world. It is our goal to be the leading auto original equipment manufacturer in the NEV segment in India and we will be working tirelessly to bring the best available technology into India, so that we can give the Indian consumers what they truly want — world- class cars at affordable prices,” said Parth Jindal, member of the steering committee of JSW MG Motor India.
The joint venture plans to launch a new product, including NEVs, every three to six months, beginning this festive season, with two new products slated to be launched this calendar year. The joint venture is targeting to sell 10 lakh electric vehicles by 2030. It aims to take the leadership position in the NEV category with an extensive product portfolio.
JSW MG Motor also plans to foray into the premium passenger vehicle segment.
Expansion plans
Under the JV, the production capacity will be expanded in Halol, Gujarat, with a focus on producing NEVs. This will increase the production capacity from 1,00,000-plus to up to 3,00,000 vehicles annually. “We will manufacture them in India not only for India but also export these cars to the most developed markets,” says Parth.
Besides the JV, the JSW Group is separately investing Rs 40,000 crore and has signed a deal with the Odisha government to set up an EV and EV battery manufacturing project at Cuttack and Paradip. The memorandum of understanding in this regard was signed on February 10. The company plans to invest Rs 25,000 crore in Cuttack for the EV and its battery manufacturing complex, while Rs 15,000 crore will be invested in the EV components’ manufacturing facility in Paradip.
