Reliance Industries Drives into the Auto Industry, Eyes Potential Stake in MG Motor India

The majority ownership of the company is currently held by MG Motor India, a subsidiary of SIAC Motor of China with operations in Halol, Gujarat. This choice is being made as tensions between India and China are rising.

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Numerous businesses with connections to China encounter difficulties when dealing with the Indian government for a number of reasons. In the form of new investment approvals, the sourcing of spare parts from China, duties and taxes, etc.

In order to raise money from its parent company for additional investments in its Indian operations, MG Motor has also requested government approval. This sanction has been proposed for the past two years, but without success. As a result, the company has decided to raise money in other ways, particularly through Indian entities.

Sale of the Majority of MG Motor India
MG Motor initially announced plans to indigenize its board, supply chain, and other operational areas over the following few years. However, given that the business expects to complete the transaction by the end of this year, this choice might be made sooner.

MG acquired General Motors' Halol manufacturing facility in Gujarat, which has the capacity to produce 1.2 lakh units. A second plant is also anticipated to be built in Halol, bringing installed capacity to 3 lakh units annually.

The automaker announced that it intends to raise approximately Rs 5,000 crores in capital over the next two to four years for this second phase of growth in India, for which it will give local partners and investors a majority stake. As of now, the company sees Reliance Industries, Hero Group, Premji Invest, and JSW Group as potential investors.

Launches of New Electric Vehicles and a Growing Workforce
In India, MG currently sells six different models, including the Hector and Hector Plus, Gloster, ZS EV, Astor, and the recently introduced Comet EV. 4-5 new cars will be introduced in India by MG Motor India, with an emphasis on electric vehicles. Up to 65 to 75 percent of its national sales will come from this electric car portfolio.

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The company wants to establish cell manufacturing and hydrogen fuel-cell technology through joint ventures or through third-party manufacturing in addition to expanding its product line. By 2028, MG Motor India hopes to hire 20,000 more people as a result of these plans.