Chinese-owned MG Motor India to sell majority stake; invest $700 million by 2028

[NG Missile Vessels]

MG Motor India, the local subsidiary of the Chinese-owned passenger vehicle major, has come up with an ambitious plan to transform its business by 2028 amid Indian government’s onslaught on investments from the neighbouring country. After securing one per cent share of India’s passenger four-wheeler market in 2023, the company is now planning to bring in local owners in its bid to ‘Indianise’ the business.

The foreign owners of the company are now planing to divest its majority stake to Indian partners within 2-4 years. For the same, it has already started scouting for buyers among Indian investors, including institutions, its local business partners and HNIs. “We will finalise the new investors-cum-owners of MG Motor India, who together would own more than 50 per cent of the company within FY24," Rajeev Chaba, CEO Emeritus, MG Motor India told the media today. The aim is to ‘Indianise’ the company that will, in turn, help it raise funds for the next phase of expansion through expansion in its production capacity.

The move comes at time, when the Indian government is increasing its scrutiny on investments from Chinese entities and their operations in India. As per sources, last year the Ministry of Corporate Affairs (MCA) had sent a notice to MG Motor India on certain alleged irregularities in its books. It had asked the company's directors and its auditor Deloitte to explain certain alleged audit deficiencies that had been discovered during the course of the probe.

Indian investors like Sajjan Jindal-led JSW Group to sell close to a 15 per cent stake. MG Motor is owned by SAIC Motor Corporation (formerly Shanghai Automotive Industry Corporation) - a Chinese state-owned automobile manufacturer headquartered in Anting, Shanghai.

As per the plan, said Chaba, the auto maker aims to raise at least Rs 5,000 crore over the next few years against its stake sale to the Indian investors and utilise the proceeds in the form of capital investment. While the company currently has a production capacity of 70,000 units a year at its Halol plant in Gujarat, in the next phase it plans to set up a second unit at the same location, which will ramp up its capacity to 3,00,000 units a year by 2028.

In the first phase of the five year plan, MG has set a few crucial targets. First, to finalise the Indian investors, who will pick up stake in the company - over 50 per cent its total shares - by March, 2024. Second, it will ramp up capacity at its existing Halol manufacturing plant to 120,000 units a year by 2025. Third, MG Motor India that sold some 48,000 cars in 2022, aims to increase its sales to 80,000-100,000 units a year within next two years.

According to Chaba, the company is now focusing on profitability and broke even at cash level in March 2023. The company has also set another target of having 65-70 per cent of its portfolio comprising of electric vehicles by the end of five years, when its second plant will be operational.

MG Motor confirms second plant at Halol; to dilute majority stake | Autocar India

MG Motor India is looking to attract investments for a second plant at Halol that will produce 4-5 new cars, most being EVs. Click here for more details.

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Chinese-owned MG Motor India to sell majority stake; invest Rs 5,000 crore by 2028

Amid Indian govt’s restrictions on Chinese investments, MG Motor India lays a 5-year roadmap to ‘Indianise’ business; to set up 2nd plant in Halol (Gujarat) and boost production to 300,000 units a year

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@Skull and Bones @Cheepek @Raj-Hindustani @ni8mare @indushek @legacytiger18 @MilSpec @beijingwalker @etylo @Beast @Bilal9 @kankan326

 

[Skull and Bones]

Don’t be fooled, MG motors make shitty cars. You’re better off buying Tata Harrier or Mahindra XUV 700.

 

[Bilal9]

One more attempt to run Chinese Investor companies like SAIC off the road in India. You came in - your fault. Now sell for nothing and leave. This should be a warning for all investors trying to invest in India. Crying foul will not soften Indian selfish regulators' hearts.

@beijingwalker @etylo @Beast one more example after HuaWei where Chinese investors are facing harassing step-motherly action from Indian Govt.

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Reinforced commitment to 'Make in India' & EVs: MG Motors' Rajeev Chaba on Govt scrutiny​

Chaba says the company has always reinforced its commitment to national policies such as the 'Make in India initiative', and its push for battery electric vehicles (BEVs).​

By RISHI KANT, Jan 12, 2023 3 min read

Rajeev Chaba, president and managing director, MG Motor India

Image: Sanjay Rawat

Calling the increased regulatory scrutiny around MG Motor India a 'consequence of geopolitical tensions', the run-ins that the Chinese-owned British car brand has had with the Indian government is part of the 'occupational hazard' that it faces while operating in India, Rajeev Chaba, president and managing director, MG Motor India tells Fortune India. "It is an occupational hazard. You don't want it to happen, but these are realities of life," he says.

MG Motor India—which is owned by state-owned Shanghai Automotive Industry Corporation (SAIC) Motor—has seen the regulatory noose tighten around its operations, as Indian regulators are coming down heavily on Chinese companies operating in India. However, "We want to be a sizeable player, at least in the new energy space. We are quite confident that we will deliver, but yes, we need a good ecosystem to support our growth. Not just literal growth, we feel that we’re adding value to the Indian automobile industry, and we want to add more value," he says.

While geopolitically the situation between India and China remains precarious, Chaba says that on business, MG Motor India has been adding a lot of value, with a strong foundation. "We are bringing EVs to the country, we are also localising batteries. We have disrupted the industry by raising the bar in a few areas," he explains.

Chaba says the company has partnered with 30 colleges across the country to nurture students—teaching them about EVs and connected car technologies. "We're only a small player in the country—only 1.5% market share—but we're punching above our weight," he says.

Chaba mentions the company is in the process of indigenising production. "We're doing lots of localisation. We have also shifted some of the supplies to India. For instance, we're now sourcing our chips from Bosch India instead of Bosch China," he says. According to him, the government is also taking cognisance of which company is contributing to the 'Make in India' initiative; which company is localising, and is then taking a call on individual companies. "It also depends on which sector you are operating in—whether it is sensitive or not. For instance, telecom is different, automobile is different."

The solid foundations, according to him, that the company has laid, has reaped benefits which have received recognition. "We are number one in customer satisfaction—both sales and after-sales. We are also working on the diversity front—37% of our workforce consists of women," he says. Chaba also claims that the 37% figure is one of the best globally, but the company will not stop there. "We want to take it to 50%.

We are among the top three in the dealer satisfaction surveys as well; we have also fared well in employee satisfaction," he says. This, according to Chaba, is giving all stakeholders a compelling reason to be a part of the company’s journey, and on the sustainability front, it is giving the government a compelling reason with its collaborations with different institutes of higher learning—namely IIT Delhi.

Don’t be fooled, MG motors make shitty cars. You’re better off buying Tata Harrier or Mahindra XUV 700.

Of course, they have to. They are Chinese.

Indian cars are world best. Especially when covered in Bull$hit, which is a popular aftermarket add-on in India.