MG Motor India, a subsidiary of SIAC Motor of China, has announced plans to dilute its majority stake in the company to Indian entities. The decision comes amidst rising tensions between India and China, which have impacted several companies with links to China.
The automaker, which operates in Halol, Gujarat, has sought government approval for raising funds from its parent company for added investments into its Indian operations for the past two years, but to no success. Hence, it has now decided to raise capital via other means, particularly through Indian entities.
MG Motor had initially planned to Indianize its board, supply chain, and other aspects of operation over the next couple of years, but this decision may come sooner, with the company planning to close the deal by the end of this year.
The automaker has the capacity to produce 1.2 lakh units from its Halol manufacturing plant in Gujarat, and there is also a second plant likely to come up in Halol, taking installed capacity up to 3 lakh units per annum.
MG Motor India plans to raise around Rs 5,000 crores capital over the next 2-4 years for the second round of growth in India, for which it will offer a majority stake to local partners and investors. As of now, the company sees likely investors in the form of Reliance Industries, Hero Group, Premji Invest, and JSW Group.
In addition to increasing its product lineup, the company plans to set up cell manufacturing and hydrogen fuel-cell technology via joint ventures or through third-party manufacturing. With these plans, MG Motor India also plans to expand its workforce to around 20,000 by 2028.
MG Motor currently offers six models in India, including the Hector and Hector Plus, Gloster, ZS EV, and Astor, along with the recently launched Comet EV. The company has also announced plans to launch 4-5 new cars in India, with special emphasis on electric vehicles, which are expected to contribute up to 65-75 percent of its total sales in the country.