According to a corporate filing to the Shanghai Exchange, MG Motor, a subsidiary of SAIC, plans to introduce investors such as JSW Ventures Singapore Pte. Limited (referred to as JSW Singapore) through equity transfer and capital increase for expansion.
JSW Singapore will buy 1.012 billion shares of MG Motor India held by Shanghai Automotive Hong Kong Investment for INR26.51 billion (US$317.52 million). Additionally, JSW Singapore will subscribe to 354 million newly issued shares of MG Motor India for INR9.26 billion. After completing the transactions, their combined stake in MG Motor India will amount to 35%.
According to the filing, SAIC aimed to bolster its globalization strategy and capitalize on India's rapid growth opportunities. The company seeks to continually strengthen the MG brand's market presence in India while effectively mitigating operational risks.
Autocar Professional quoted Yu De, head of international operations and assistant to the president of SAIC, saying that the company has a very ambitious plan and good cooperation with JSW Group. He said SAIC is looking at setting up a second plant in India, adding that a minimum of US$1-2 billion is lined up for the next five years.
According to Autocar Professional, SAIC plans to offer a portfolio of high-tech and affordable vehicles in India. Moreover, the company is open to collaborating with the JSW Group to localize battery packs and, eventually, cells for its Electric Vehicle (EV) initiative.
SAIC made its entry into the Indian market in 2017 through MG Motor and commenced sales in 2019. Its decision to introduce India-based investors came amid the souring of bilateral ties between China and India. Reuter reported in April that as MG Motor India aimed to continue to increase its market share in India and effectively prevent operating risks, the SAIC subsidiary planned to introduce local Indian investors to create more favorable conditions for sustainable and healthy development.
