MG Motor India to invest $100 million to expand capacity, eyes 70 percent growth in 2023
The company is to expand manufacturing capacity from 1.2 to 1.4-1.5 lakh units at its Halol plant in Gujarat.
Backed by improved supplies and sustained booking momentum, MG Motor, the British brand owned by China's largest automaker Shanghai Automotive plans to invest $100 million to expand capacity at its existing facility in Halol, Gujarat and expand product portfolio in EVs.
The company is planning to increase capacity from 1.2 lakh to 1.4-1.5 lakh units this year through a debottlenecking exercise, which will fulfil its requirements for the next few years, says Rajeev Chaba, President of MG Motors India.
“The discussion on Phase Two expansion is still on, but it is not an urgent matter at present, with additional capacities which are likely to be released through debottlenecking and efficiency improvements. We will fund this expansion through internal accruals and loans,” said Chaba on the sidelines of unveiling of its global range of EVs and hybrids at the AutoExpo 2023.
The plan is a slight deviation from an earlier plan of adding an all-new facility within a couple of years, for which the company has been actively scouting for greenfield as well as acquisition opportunities.
“We continue to believe in the strong growth potential of the Indian market and we are working towards the government's vision of making locally, doing local value addition and democratising future technologies with focus on local skill development,” he added.
Chaba says, the discussion on the Phase Two investment is a regular exercise, “but with the de-bottlenecking plan, the urgency of it has eased a bit.”
“We continue to explore all opportunities of expansion — right from greenfield, brownfield, acquisition or an alliance, because it takes time for a new facility to come up,” Chaba said.
The company's FDI proposal with the Government of India is facing sustained hurdles given the geo-political challenges and hence it has been compelled to rely on external commercial borrowings and loans. Chaba says there is a regular discussion with the private equity majors to raise funds for the future, but the company is waiting for a right partner to secure the right valuation.
The company which closed 2022 with sales of close to 50,000 units is planning for a 70 percent increase in volume growth in 2023, which will take its sales target to 80-100 thousand units for 2023.
“We are expecting an improved supply chain scenario, apart from diversifying the sources for semiconductor chips, we are also sourcing from Bosch's local unit which will ensure a much higher output. With the new Hector, the all-new EV and extracting the right potential of Astor SUV, we are confident of growing by 70-80 percent in a market which is expected to grow in single digits in 2023,” added Chaba.
With sustainability as its key theme at the AutoExpo 2023 the company showcased selected products from MG's global range of hybrid, plug-in hybrid and full EVs at its pavillion.
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