MG Motor India to invest Rs 200 crore in 2021 on localising electronics

by Mayank Dhingra 27 Feb 2021


SAIC-owned MG Motor (Morris Garages) which entered the Indian market in 2017 by starting operations through its domestic entity – MG Motor India – and acquiring General Motors’ brownfield plant in Halol, Gujarat, is now looking to enhance the localisation content in its locally-made products.

Its maiden SUV, the MG Hector, which recently clocked the 50,000-unit production milestone since its introduction in June 2019, is also the first in line to drive the company’s new endeavour, which puts a greater emphasis on the localisation of electronics.

In an exclusive interview to our sister publication Autocar India, Rajeev Chaba, president and managing director, MG Motor India, said: “We have taken a step to enhance localisation in the Hector by a further 10 percent this year. Our teams are taking the challenge to even localise some of the electronics and modules which are currently being imported.”

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“Presently, we have some electronics and modules coming from China, while at the same time, a lot of semiconductors and chips are coming from Europe as well,” he said.

In the present scenario, the Hector in its diesel form, comes with a gross localisation structure of 84 percent, with the 2.0-litre turbocharged engine being locally sourced from Fiat Chrysler Automobiles (FCA) in Ranjangaon, Pune. On the other hand, the petrol-powered variants of the SUV come with about 55 percent of local content with the 1.5-litre turbocharged petrol motor with an optional 48V mild-hybrid setup, comes fully imported.

Sharpened focus on localisation of powertrains
Going forward, the company is targeting to enhance localisation levels in the Hector from an average of 70 percent to up to 80 percent by end-2021.

According to Chaba, “We are going to spend Rs 200 crore this year to help vendors localise these components. We have programmes underway with MSMEs to drive this additional localisation in the Hector. We are spending a lot of energy and money in this accord.”

The company also aims to completely localise its powertrains going forward, and as per Chaba, “For powertrains to be localised, one requires a lot of volumes. But fortunately, in India it is possible even with 50,000 annual units. So, complete localisation of the powertrain is also on the cards for MG Motor India in the near future.”

Halol plant to produce 1,00,000 cars annually by 2022
MG took over the Halol facility from General Motors which was exiting the Indian market in 2017. The plant is currently capable of churning out 80,000 units annually, and handles the production of the Hector family (including the 6- and 7-seat Hector Plus), the ZS EV and the Gloster. “Right now, we can manage around 4,000-4,500 cars a month. The paint shop is a constraint, so we have two shifts operating there. In other lines, we have a single shift operation,” commented Chaba.

“Before we introduce our fourth car (Model K) in the third quarter of this year, we need to increase capacity to 7,000-8,000 units a month, and that’s what we are focusing on right now. This means, we can go up to 80,000-90,000 cars a year,” he said.  

However, in a further push, the company plans to maximise the facility moving forward. “We are working on further expanding the capacity to probably 1,00,000-plus units in this plant itself,” said the MG India head. He hopes to achieve the target “by next year”, utilising all of the plant’s assets around the clock. “By having two complete shifts for the rest of the line, and three shifts for the paint shop, we can go up to 1,00,000 units,” he added. “But after that, we need to think about phase two, which is another plant.”

(Inputs from Autocar India)