MG Motors India to Sell Stakes?
MG Motor India, a subsidiary of the Chinese-owned passenger vehicle major, is planning to ‘Indianise’ its business by bringing in local owners and divesting its majority stake to Indian partners within the next 2-4 years. The company is currently scouting for buyers among Indian investors, including institutions, local business partners, and HNIs, with the aim of finalizing new investors who will together own more than 50% of the company within FY24.
This move is in response to the Indian government’s scrutiny of investments from China, which has led to challenges for companies with links to China, including MG Motor India. The company aims to raise funds for its next phase of expansion, including expanding its production capacity and has set an ambitious target of securing a 10% share of India’s passenger four-wheeler market by 2028, up from its current 1% share.
As a result, the company has decided to raise capital through other means, including offering a majority stake to local partners and investors. Reliance Industries, Hero Group, Premji Invest, and JSW Group are among the potential investors in this second round of growth in India.
MG Motor India is also planning to launch 4-5 new cars in India, with a focus on electric vehicles. The company aims to have its electric car portfolio contribute up to 65-75 percent of its total sales in the country. In addition to expanding its product lineup, MG Motor India plans to set up cell manufacturing and hydrogen fuel-cell technology through joint ventures or third-party manufacturing. The automaker also plans to increase its workforce to around 20,000 by 2028.
Overall, it seems that MG Motor India is taking steps to expand its presence in India despite facing challenges related to government approvals and sourcing of spare parts from China. By raising capital through local partners and investors, launching new electric vehicles, and investing in new technologies, the company hopes to position itself for long-term growth in the Indian market.
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