We’ve heard that Mukesh Ambani may pick majority stake in Morris Garages (MG) Motor India, and the latest news is that Sajjan Jindal of the JSW Group may be eyeing a stake now — whoever be the winner of the deal, MG will become a majority Indian-owned electric vehicle (EV) player soon.
MG Motor India is currently a wholly-owned subsidiary of Shanghai-headquartered SAIC Motor.
If Jindal manages to pick up a majority stake, the group’s listed companies, that is, JSW Steel and JSW Energy, will not have any exposure to MG Motor India.
MG’s vehicles in India
MG’s current vehicles in India include the ZS and Comet electric vehicles, which are in the high-end and low-end categories.
The ZS is priced from Rs 23 lakh (Rs 2.3 million) while the Comet EV’s price starts from below Rs 8 lakh (Rs 800,000). In fact, the Comet is India’s cheapest EV, and is a micro car.
MG hopes to get a good response for its budget EV. But looking at the way the small car Tata Nano went into oblivion, MG India has reason to worry.
Besides EVs, MG also has the Gloster, Astor and Hector, all SUVs, in Its India stable.
The idea of an Indian magnate picking a majority (51 per cent) stake is to make the company a fully Indian one.
This comes as the bitter rivalry between India and China is affecting Chinese companies doing business in India.
MG to become Indian firm
In fact, Chinese mobile phone companies are also either looking to induct senior Indian executives in their management or are looking to make their companies into Indian majority firms in order to survive.
So, it would make sense if MG Motor India changed hands to become an Indian company.
In fact, Mr Jindal and his son Parth were believed to be in China to meet SAIC Motor officials for possible negotiations.
SAIC Motor investment hurdle
SAIC Motor had infused Rs 5,000 crore into MG Motor India, and was keen to invest the same amount again.
In fact, the border standoff between China and India prevented it from making any further investment.
And ultimately, it has decided to sell its majority stake, though it may retain a minority stake (49 per cent).
MG not a major player in India
Currently, MG Motor India is valued at around $12 billion but has failed to make a major dent in the Indian car market.
Annual sales of MG Motor India were a tad less than 50,000 vehicles across categories in FY23, even though the growth from the previous year (FY22) was encouraging at over 20 per cent.
MG Motor India plans
With the MG Comet EV, it hopes to make major inroads into the Indian car market.
MG India plans to introduce four to five electric vehicles by 2026-2028 in the Indian market.
E-Vroooom’s views
But for that to happen, stake issues need to be resolved quickly (with Sajjan Jindal, Mukesh Ambani or others) and MG Motor India would need to introduce more budget electric vehicles and localize to bring down costs in order to stay ahead in the Indian EV race.
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