Saic: MG to become local in India: China’s SAIC signs JV with Sajjan Jindal to expand in India

NEW DELHI: In the first case of a top Chinese company making way for an Indian investor, steel magnate Sajjan Jindal’s JSW group will be buying a 35% stake in MG Motor India, a fully-owned unit of China’s automotive giant SAIC, capping a deal that had been in the works for almost a year.
Jindal, the country’s steel magnate, had been eyeing the auto industry for the past 3-4 years, but zeroed in on MG Motor India only recently, at a time when the Chinese company was facing immense difficulties in scaling up due to restrictions in raising funds following Indo-China border and diplomatic tensions.
Jindal is likely to get a majority 51% stake in the company over the next 3-4 years as MG Motor will go for an IPO and new financial investors also enter, while SAIC would lower its exposure, as per sources.
With MG, Jindal is expected to get access to a vault of automotive technology ranging from electrics, to fuel cell and conventional petrol and diesel, apart from car body styles going from minis, sedans, SUVs, MPVs and other peoples carriers.
MG, on the other hand, will immediately find it easy to expand in the country, and now can even pursue acquisitions such as Ford’s plant in Chennai that it has been eyeing for a long time to gain production capacity.
TOI had first reported the talks between the two companies on April 25 this year, and highlighted the deal moving to a closure on October 27.
“The Shareholder Agreement and Share Purchase & Share Subscription agreement were signed by the President of SAIC Wang Xiaoqiu and JSW Group’s Parth Jindal at the MG Office in London with the objective of accelerating the transformation and growth of MG Motor in India. SAIC Motor and JSW Group will create strategic synergies by bringing together resources in the field of automobiles and new technology. The joint venture will also undertake multiple new initiatives including augmenting local sourcing, improving charging infrastructure, expansion of production capacity, and introducing a broader range of vehicles with a focus on green mobility,” SAIC, MG and JSW said in a joint statement released after the ‘strategic joint venture’ agreement was signed in London.
According to the agreement, JSW will hold 35% in the Indian JV operations, while SAIC will continue supporting the joint venture with advanced technology and products to deliver mobility solutions tailored to the needs of Indian consumers.
“The automobile business is a global industry, and like in any other similar industry, access and collaboration are crucial for its healthy growth,” Wang Xiaoqiu, President of SAIC Motor, said.
“SAIC has always adhered to the ‘win-win cooperation’ approach while steadily improving our core capabilities and expanding our scale of production and sales. In the growing Indian automotive market, both partners shall work closely to bring in the best of innovation, in creating greener and smarter mobility products and services for our consumers, seizing market opportunities, continuously expanding the brand influence and market share of our products, and achieving greater success for MG in India.”
JSW Group’s Parth Jindal said that JV aims to “grow and transform” the operations of MG Motor in India green mobility solutions.
“The joint venture paves the way for bringing world-class technology-enabled futuristics suite of automobile products, including the new generation of intelligent connected NEVs (new energy vehicles) and ICE vehicles. The JV’s focus on broader localisation initiatives will yield financially accretive synergies through economies of scale while providing the highest level of customer service to the Indian consumer.”
Jindal said that one of the key focus areas of the JV will be to pursue the development of the EV ecosystem and to take leadership position in the space.
“We would like to thank SAIC and MG Motor for choosing JSW as their partners of choice and look forward to building one of India’s largest automobile companies together. The rich history of the MG brand is known to all and its success in India is there for all to see and it is truly an honour to be able to take this brand and company forward alongside a strong global partner in SAIC. We cannot wait to get going.”
Apart from the vast automotive experience of SAIC, the JV aims to leverage the large presence of JSW Group across B2B and B2C sectors of the Indian economy to augment local sourcing and establish a robust supply chain.

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