SAIC Motor and JSW Group announce a strategic Joint Venture to accelerate growth with focus on green mobility

The joint venture will also undertake multiple new initiatives including augmenting local sourcing, improving charging infrastructure, expansion of production capacity, and introducing a broader range of vehicles with a focus on green mobility.

Autocar Pro News Desk By Autocar Pro News Desk calendar 30 Nov 2023 Views icon21632 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
SAIC Motor and JSW Group announce a strategic Joint Venture to accelerate growth with focus on green mobility

After six months of intense discussion, Sajjan Jindal promoted JSW Group has signed a joint venture agreement with China's largest car maker - Shanghai Automotive Industry Corporation or SAIC Motor.

According to the agreement signed, JSW Group will hold 35% in the Indian JV operations, wherein SAIC will continue supporting the joint venture with advanced technology and products to deliver mobility solutions focused on the Indian buyers.

The Shareholder Agreement and Share Purchase & Share Subscription agreement were signed by the President of SAIC Wang Xiaoqiu and JSW Group’s Parth Jindal at the MG Office in London on Thursday afternoon with the objective of accelerating the transformation and growth of MG Motor in India.

Contours of the JV 

The joint venture will also undertake multiple new initiatives including augmenting local sourcing, improving charging infrastructure, the expansion of production capacity, and introducing a broader range of vehicles with a focus on green mobility, SAIC Motor and JSW Group will create strategic synergies by bringing together resources in the field of automobiles and new technology, the joint statement from the company stated.

Jindal said, the strategic collaboration with SAIC Motor aims to grow & transform the MG Motor operations in India with a focus on green mobility solutions. The joint venture paves the way for bringing in a world-class technology-enabled futuristic suite of automobile products including the new generation of intelligent connected (New Energy Vehicle) NEVs and ICE (Internal Combustion Engine) vehicles. 

“One of the key focus areas of this joint venture will be to pursue the development of the EV ecosystem and to take a leadership position in this space. We would like to thank SAIC and MG Motor for choosing JSW as their partners of choice and look forward to building one of India’s largest automobile companies together. The rich history of the MG brand is known to all and its success in India is there for all to see and it is truly an honour to be able to take this brand and company forward alongside a strong global partner in SAIC. We cannot wait to get going,” added Jindal.

The scion of JSW Group stated the JV’s focus on broader localisation initiatives will yield financially accretive synergies through economies of scale.  

Wang Xiaoqiu, President of SAIC Motor said, the automobile business is a global industry, and like in any other similar industry, access and collaboration are crucial for its healthy growth. SAIC has always adhered to the 'win-win cooperation' approach while steadily improving our core capabilities and expanding our scale of production and sales.

“In the growing Indian automotive market, both partners shall work closely to bring in the best of innovation, in creating greener and smarter mobility products and services for our consumers, seizing market opportunities, continuously expanding the brand influence and market share of our products, and achieving greater success for MG in India," added Xiaoqiu.


While the valuation details were not revealed and the press release was also unclear, where the stake buy is in M G Motor India.

People in the know say, that while M G Motor was seeking a valuation of around $1 billion, the recent moderation of its sales and a resultant impact on profitability was leading to talks on stake dilution at a lower price.

With its FDI proposal stuck with the Government of India for several years now, M G Motor India, the Indian subsidiary of China's largest car maker SAIC Motor Corporation has decided to divest a majority stake in the company to Indian investors.

How the JV will help M G Motor India 

The move will enable M G Motor India to sustain its domestic operation in partnership with a local player. The negotiations for this deal took almost six months, before the contours were finalised. The process of stake sale was likely to be consummated in 2023 and it may eventually lead to a public listing five years from now, Rajeev Chaba, the CEO Emeritus had said on May 10. 

Autocar Professional had exclusively reported that the company is in talks with JSW Group for dilution of stake on April 24, 2023.

Chaba, the CEO Emeritus of M G Motor India had then told media persons in Delhi in May that the company has defined its long-term plan till 2028.

As part of its 2.0 and 3.0 strategy, the company was in the process of Indianising itself across various aspects including ownership, board structure, manufacturing footprint and localising of the supply chain.

“The plan is to Indianise the operation. The first step will be announced in 2023. We plan to dilute our shareholding in two to four years. We want to Indianise the board, management, shareholding and supply chain. The majority stake in the coming years will be owned by an Indian partner,” Chaba had said then.

Elucidating the new long strategy, Chaba said the 2.0 plan is from 2023 to 2025 which entails expansion of capacity from 70,000 units per annum to 1.2 lakh units.

With the portfolio of five products including the new Comet EV, the company was aiming to more than double its volumes to 80,000 units to one lakh units and thereby look at breaking into profit to ensure a decent valuation for the company - six months since the volume plans have not gone as per the plan and it may end up selling only 60,000 to 70,000 units as against 80,000 units to 1 lakh units plan. 

Once the new investor is brought on board later in 2023, the funds raised from the divestment will be used in the expansion of plant capacity from 1.2 lakh units to three lakh units, with the second plant calling for an investment of Rs 5,000 crore.

Apart from diluting a majority stake to the JSW Group, the company will be offering about 7-8 percent equity to financial institutions dealers and company employees, over time M G Motor is likely to dilute its stake further, with JSW holding majority.

Road ahead 

In a short span of five years, M G Motor India was able to set up a successful operation, despite monthly volumes of just 4,000 to 5,000 units, the company had made a mark for itself in the premium SUV market, despite intense competition. It also rode the wave of SUVs and electric vehicles (EVs) and broke into the top three EV makers in the country.

Going ahead too, EVs will be at the core of expansion of M G Motor’s plans in the future.

It will start assembly of batteries for its EVs in 2024 and it is also exploring the possibility of cell manufacturing in the country with an alliance partner. The company expects EV sales contribution to move up from 30-35 percent in 2023 to 60-65 percent by 2028.

With the equity infusion from the parent company stuck since 2020, M G Motor has been relying on ECB loans or external commercial borrowings to meet its working capital requirement and fund its new product introduction plans to stay relevant in the Indian market.

The SUV specialist has already invested close to Rs 7,000 crore in India and was ready to infuse a similar amount, but the FDI proposal has been stuck with the Government of India since 2020, after several skirmishes at the India-China border. Since its entry M G Motor has sold over 2 lakh vehicles in the country.

MG Motor India’s decision to sell its stake was taken amid struggles to obtain FDI clearance from the Government of India for its future investment. This is precisely the same reason why Great Wall Motors, Changan and Foton, despite spending years in India, decided to exit the market amid geo-political tension. Late last year, the income tax department launched a search operation for alleged irregularities in the company’s accounts.

MG Motor entered India in September 2017 by acquiring General Motors India’s Halol plant. It has been manufacturing vehicles over the past four to five years but since the factory is over a decade-and-a-half old, there is a limitation to the extent to which the brand can produce. Hence, it has been actively exploring a second plant in India for over a couple of years now.


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