In a surprising turn of events, Chinese automaker MG Motor India is on the brink of changing ownership as Sajjan Jindal, Chairman of JSW Group, is closing in on a deal to acquire a significant stake in the company. The acquisition would shift the balance of ownership from the current Chinese parent company, SAIC Motor, to Indian entities, with Jindal Group expected to secure a 48 percent stake.
Negotiations and Stake Distribution: The latest report reveals that Sajjan Jindal is in the final stages of acquiring approximately 45-48 percent of MG Motor India through one of his privately-owned companies. Moreover, Indian employees and dealers associated with MG Motor India will also be granted a 5-8 percent stake in the company. This arrangement would result in Indian entities holding a controlling 51 percent equity, while SAIC Motor would retain the remaining 49 percent.
Transition to an Indian Entity: If the deal successfully goes through, MG Motor India will undergo a significant transformation, transitioning from a Chinese entity to an Indian one with an Indian-dominated top management. To materialize this plan, Sajjan Jindal and his son recently met with SAIC Motor officials in China as part of the ongoing negotiations, which have been in progress for several months. Industry insiders suggest that the necessary legal agreements have already been initiated, and the process is expected to be completed within the next 3-4 months.
Company Overview: Originally a British brand, MG Motor became a part of SAIC Motor, one of China’s largest auto groups. In 2019, MG Motor India entered the Indian market with its flagship product, the Hector midsize SUV. The company’s current portfolio in India includes the Hector, Hector Plus, Gloster, Astor, ZS EV, and Comet EV.
Challenges Faced: MG Motor India faced several challenges, including the impact of the COVID-19 pandemic and the border tensions between India and China. In response to China’s actions, the Indian government imposed restrictions on foreign investments from China, causing disruptions in the operations of Chinese companies. As a result, even Great Wall Motor canceled its plans to enter the Indian car market. These circumstances led MG Motor India to rely on external commercial borrowings from SAIC Motor to sustain its operations.
Future Focus: Despite the hurdles, MG Motor India remains committed to the Indian market and is currently focusing on SUVs, catering to the preferences of Indian consumers. The brand’s lineup includes popular models such as the Hector, Astor, Gloster, and ZS EV. Recently, MG also introduced the Comet EV, a city-centric electric hatchback aimed at the commuter segment.
The potential acquisition of a 48 percent stake in MG Motor India by Sajjan Jindal’s Jindal Group signifies a significant shift in ownership from Chinese to Indian entities. This move not only positions MG Motor India as an Indian company but also presents an opportunity for the brand to strengthen its presence and offerings in the dynamic Indian automotive market.