MG Motor India and JSW Group is Aiming for ‘Maruti Moment’ With Joint Venture for New Energy Vehicles
MG Motor India and JSW Group is Aiming for ‘Maruti Moment’ With Joint Venture for New Energy Vehicles
The joint venture between MG Motor India and JSW Group aims to create a ‘Maruti moment’ by establishing a new energy vehicle company After months of speculation, Chinese auto giant SAIC Motor and JSW Group formalised their joint venture (JV) agreement to create a new avatar for passenger car maker MG Motor India. The JV entity—JSW MG Motor India Pvt. Ltd—with its majority stake now held by Indian entities and individuals, is expected to impart growth momentum for MG Motor in India. While the deal brings fresh investments, for Sajjan Jindal-led JSW Group it could well prove to be a perfect path to enter the consumer business while boosting sales of its steel, paints, and mining businesses. MG Motor India was a local subsidiary of SAIC Motor.
JSW Group will now own 35% in JSW Group ,MG Motor India, while 8% stake is with Indian financial institutions, 3% is held by the company’s dealers, and employees will hold 5%. According to Rajeev Chaba, CEO Emeritus, MG Motor India, the 51% stake sold to JSW Group and other Indian entities fetched the automaker in excess of `5,000 crore, which it plans to invest in expanding its production capacity to 300,000 units a year from 120,000 units and launch new vehicles in the local market.
Despite holding a smaller stake than SAIC Motor (which will now hold 49%) in the new entity, a JSW Group nominee will hold the position of chairman, while its board will be jointly managed by SAIC Motor and JSW Group. A steering committee—comprising members from JSW Group,SAIC Motor, MG Motor , and Indian financial institutions would run the show, says Parth Jindal, Managing Director of JSW Cement. According to him, the new entity would strive to establish itself as a new energy vehicle company. Out of the projected 4 million new energy passenger car sales a year by 2030, Jindal aims to capture 33% of the market.
JSW Group Chairman Sajjan Jindal says to accelerate growth, JSW Group MG Motor India will launch a new car every three to six months, starting September when the festive season begins. “We will design and manufacture in India and also export to developed markets. My dream with MG Motor is to create a ‘Maruti moment’. In 1984, when Maruti came to India, it changed the auto industry. We aim to do the same with MG,” he says. MG Motor is also expected to source steel from the conglomerate. Additionally, JSW Group, which has a mining arm, is planning to bid for Indian lithium mines, crucial for electric vehicles.
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