MG Motors to invest Rs 1,000 crore more in India despite anti-China mood

MG Motors, the Indian arm of China’s SAIC Motor, says it will invest a further Rs 1,000 crore in the next one year to enhance capacity.
This comes amid higher scrutiny by the government and a growing anti-China sentiment against Chinese investment.
It plans to increase localisation of products, which would mean higher manufacturing in India, and also aims to assemble battery lines locally.
“We have invested up to Rs 3,000 crore to date. We are going to invest another Rs 1,000 crore in the Halol plant over the next 12 months, which will basically take care of new launches, additional localization, and capacity enhancement,” said Rajeev Chaba, president and managing director, MG Motor India.
The company had acquired the Halol plant from General Motors, which had shut its India operations in 2017.
Chhaba said there were disruptions owing to geopolitical tensions in the short term, but global dependency takes over and exchange of trade, technology, ideas will continue in the long term.
“In the short term, you hear disruptions and can’t help that. There are always some customers who don’t want to buy products from a certain country but in the global automotive industry, consumers decide based on various parameters,” he said.
The company, which has 220 dealerships in 137 cities, plans to increase it by 100 by the end of 2021.
“We are bringing in technology, and also intend to increase localisation. The volumes are low. Therefore, a ramp-up in localisation makes sense for the Hector, in which we have decent volumes. Localisation stands at 70 per cent now. Capacity at present is 75,000-80,000 cars which will be increased to 1 lakh,” Chaba said.
The maker of the popular SUV MG Hector launched the Gloster last week, a new premium sports utility vehicle (SUV) featuring level-1 autonomous driving technology, a first by a mass-market vehicle manufacturer.
Chaba said the company was on course to launch its third product before Navratri and Diwali, despite disruptions in supply chain during the lockdown. It hopes to drive up volumes when it launches its fourth offering, in 2021.
“It’s very difficult to define the segment we are in. At this price point, we don’t have any cars giving these features and hence call this the first in that segment. Some of these features may be found in a Mercedes, BMW, or Volvo, but those are all priced at Rs 70 lakh and upwards. At a Rs 30-50 lakh price point, Gloster is unique,” he said, describing the positioning of the Gloster.