[TusharK]

China-based SAIC Motor Corp Ltd. has announced that it will bring in local investors in India. As part of this strategy, JSW Ventures plans to buy a 35% stake in MG Motor India for Rs 3,580 crore.



According to SAIC, InfoEdge India Fund will buy an 8% stake in the company as well. A dealer trust will take a 3% stake, while an employee stock ownership plan will control a 5% stake.

"As MG Motor India aims to continue to increase MG brand's market share in India and effectively prevent operating risks, the unit plans to introduce local Indian investors to create more favourable conditions for sustainable and healthy development," SAIC said in a statement.

The move comes as the government of India has sought to restrict investments from Chinese companies amid geopolitical and trade tensions.

Source: Reuters

Link to Team-BHP news

[Shreyans_Jain]

The future of MG in India seems secure for now. The Jindals have thrown their weight behind the company, and Naveen Jindal has already joined the ruling party and has even been declared as a candidate. We should see new models, new investments and progress on stuck proposals post elections.

[ajmat]

Originally Posted by Shreyans_Jain

Naveen Jindal has already joined the ruling party and has even been declared as a candidate. We should see new models, new investments and progress on stuck proposals post elections.

Frankly, this sends a message that India is not a level playing field. Conflicts of interest etc.

[Shreyans_Jain]

Originally Posted by ajmat

Frankly, this sends a message that India is not a level playing field. Conflicts of interest etc.

Isn’t that true? It’s just a hard fact of life that you have to accept.

MG’s proposals for investment and expansion in India had been rejected, not on merit but purely geopolitics. These proposals would have created tens of thousands of direct and indirect jobs in India, at a time when unemployment is high and smaller ancillary industries are struggling. It’s not even geopolitics, it is plain posturing and image building, for our trade deficit with China continues to baloon by the day. It was direct FDI, would have been subject to relevant FDI norms, but no.

They have had to join hands with JSW, a conglomerate that has no connection whatsoever with the auto industry in any way, and is embroiled in controversy. The other supposed suitor was RIL. The playing field was never level.

[volkman10]

Originally Posted by Shreyans_Jain

--- The Jindals have thrown their weight behind the company, and Naveen Jindal has already joined the ruling party and has even been declared as a candidate.--

Another clout building up..

Tesla in talks with Reliance to set up EV manufacturing arm in India

Link:

[sri_tesla]

Originally Posted by Shreyans_Jain

They have had to join hands with JSW, a conglomerate that has no connection whatsoever with the auto industry in any way, and is embroiled in controversy. The other supposed suitor was RIL. The playing field was never level.

Aren't we worried too much about lack of level playing field for a Chinese automaker which is owned by Chinese government? Most of the major Chinese automakers are state owned and all the foreign MNCs like VW, Toyota, Honda, Ford, GM, etc... had to mandatorily share 50% of Chinese entity ownership with these state owned local companies in China for decades. There was a never level playing field in major industries like automobile, technology sectors in China. In the technology sector it is even worse. None of the global behemoths like Google, Facebook, etc... are not even allowed to operate in China protecting the local companies.

On the contrary, India allowed the foreign companies like Walmart to fully own Flipkart, and allowed the likes of Amazon, Uber, Google, Microsoft, Facebook, etc... to become the monopolies or oligopolies in different technology sectors. We are allowing 100% ownership of Indian subsidiaries for automobile companies forever.

Regarding Tesla partnering with RIL, I think it has more to do with Tesla's prospects worldwide suddenly turning worse due to lower than expected demand, excess capacity in all of their newly established factories (China, Berlin, Austin). They don't want to invest huge amounts in another factory in a country where the market is not fully matured for premium EVs. Had India lowered import taxes, without any local production requirements, they would have happily imported cars from one of these factories.

[PreludeSH]

I think we are just repeating what the Chinese did. But in case of China the local partners were govt backed while here it seems not (is it ? ).

Hope we can gain the same manufacturing prowess China gained so that it can be replicated by local firms with our own products.

[Noctis]

This is absolutely great news! MG biggest weakness has been the uncertainty of their future in India, but a partnership with JSW pretty much solves it.

They have a slew of high quality vfm cars in their portfolio and I'm excited to see what their future plans for India are.

[Sedated]

Good news for mg customers in our country. Saic like byd has cutting edge tech in ev space which they showcase in their IM brand cars that could easily be rebadged as mg and sold.

[SmartCat]

Originally Posted by PreludeSH

I think we are just repeating what the Chinese did. But in case of China the local partners were govt backed while here it seems not (is it ?)

Exactly. Taste of own medicine.

[FiatDiesel]

I think it’s good. In any case Indian businesses don’t learn (read R&D) on their own or learning curve is way too long. Such JVs give aspiring businesses an opportunity to launch themselves and also customers don’t get to become beta testers for half baked products.
Now why JSW or Reliance, guess Mahindra, erstwhile PAL group also had fair share of JVs. I see JVs with new entrants to auto market just like the JV which happened between Suzuki and GOI to create Maruti which had all tech from Suzuki. In this era of privatisation obviously GOI won’t get in but groups with deep pockets would do with clear goal of profitability.

[volkman10]

Originally Posted by PreludeSH

I think we are just repeating what the Chinese did. But in case of China the local partners were govt backed while here it seems not (is it ? ).

Hope we can gain the same manufacturing prowess China gained so that it can be replicated by local firms with our own products.

It is just a kind of replication of the China model (but here, with a veiled Govt. backing)

We will not meet cost targets, and this will see more critical components imported from China.

[Nithesh_M]

Originally Posted by TusharK

The move comes as the government of India has sought to restrict investments from Chinese companies amid geopolitical and trade tensions.

I think we should stop saying stuff like this especially since our home grown OEMs across all the fields ( not just automotive) are still importing major parts in bulk from China especially after the government gave them blanket secrecy since it made it illegal to report on import export listings from websites like Zauba which we used to do on this very forum until a few years ago:
https://www.livemint.com/news/india/...348230913.html

I'm hoping somebody will challenge this order in the courts so we know who is importing what from China and sticking Made in India badges on them.

As for Jindal, one should tally their electoral bond donation dates and see if this deal came from quid pro quo as news outlets are tallying many such brokered deals by government and business houses lately.

https://www.livemint.com/news/india/...494638643.html

[SmartCat]

Originally Posted by Nithesh_M

I think we should stop saying stuff like this especially since our home grown OEMs across all the fields ( not just automotive) are still importing major parts in bulk from China

Our automotive components imports from China is valued at around $7 billion per year

https://www.newindianexpress.com/bus...t-2603122.html

[Pam81]

We need to invest in fundamental research to bring out our unique identity in Automotive market. China found themselves a way, copy for the most part and make it cheap and then dominate with that.

It's undoubtedly tough to compete with these. As much as MG gains Indian investors, it is only a image building exercise, nothing beyond that. Still majority of their stuff will come from China. That fact can't be ignored.