NEW DELHI : JSW Group may announce the purchase of a stake in MG Motor India as early as two months if the negotiations progress successfully, and the first JSW electric car could roll out from a factory as early as next year, two people familiar with the development said.
The deal, which is likely to value MG Motor India at $1.2-1.5 billion, involves the initial purchase of a minority stake by JSW Group, with a firm plan to secure a majority stake in the automaker over time.
“If the deal is finalized, most likely by Diwali, the plan is to launch the first car in early 2024,” one of the two people said on condition of anonymity.
The person added that the group is parallelly working on a Plan B to partner with a foreign company, most probably a Chinese one, to launch its product in India if the talks with MG Motor fail.
“If the MG deal does not happen, the company will be looking at a partnership with a foreign player, and the product launch could happen only in 2026,” said a second person on condition of anonymity.
The first person said issues like technology transfer for electric vehicles (EVs) still need to be finalized. “Issues still being discussed, as part of the deal, are the modalities of technology transfer for the EV technology and the issue of continuing with internal combustion engines that are part of the MG portfolio as of today. These issues and the JSW branding are also being discussed.”
The JSW Group is looking to enter the EV segment to capitalize on the rising trend. It is estimated that India’s EV market, valued at $2 billion in 2023, will more than triple to $7.09 billion by 2025. The number of EVs is likely to increase to 50 million by 2030 from about 1.4 million as of August 2022, according to industry estimates. By 2030, the Indian EV market is expected to reach 10 million units in annual sales.
A spokesman for JSW Group did not respond to Mint’s queries. A spokesperson for MG Motor India denied the story and termed the information ‘speculative in nature’.
“We categorically deny these comments as they are purely speculative in nature. As declared earlier, we are focused on executing our second phase of the MG brand, which is to localize more components and become profitable. In the long run, we are open to the idea of collaborating with an Indian partner to localize more operations to be competitive for more volumes and mutual growth,” an MG spokesperson said in an email response.
As part of the strategy to launch EVs, JSW Group is also competing with Mahindra & Mahindra Ltd to acquire the Chennai plant of Ford India.
“Both Mahindra & Mahindra and JSW are contenders for the plant,” the first person said.
Ford’s Chennai plant is spread across 350 acres and has an annual production capacity of around 200,000 vehicles and 340,000 engines. The plant has been shut since July 2022, and the state government is keen to find a new buyer to revive production. It can give a fillip to the EV plans of both companies.
An email sent to Mahindra & Mahindra did not elicit any response till press time.
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Updated: 04 Sep 2023, 11:48 PM IST
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