While SAIC may halt new investments in the JSW MG Motor JV, it will continue providing technology and products
In a report published by Reuters, it has been revealed that SAIC may be looking to reduce its stake in JSW MG Motor JV in a significant manner. This move could be due to policies that restrict Chinese investment in India. SAIC could also be facing hurdles in getting the right valuation for its stake sale in the JV. Let’s get more details on this story.
Negotiations with JSW for SAIC stake sale
SAIC is reportedly negotiating to sell its stake in the JSW MG Motor JV. JSW is willing to buy SAIC’s stake, after which, JSW will emerge as the majority shareholder in the JV. However, it appears that the deal is currently stuck, as both parties are yet to arrive at a mutually agreeable valuation of the shares held by SAIC.
Another factor that could be playing a role in SAIC’s decision-making in this context is JSW’s future plans. JSW is reportedly in advanced talks with China-based Chery Automobile for its ambitious entirely new car brand. If the talks are successful, Chery Automobile will function as a technology partner in JSW’s new automobile company. This new entity will be distinct from the existing joint venture between JSW and MG Motor.
JSW’s move to engage Chery Automobile makes the entire situation all the more complex. Chery Automobile and SAIC are rivals in both Chinese and export markets. While SAIC has a larger global presence, Chery has been witnessing robust growth across both domestic and export markets. If JSW launches its own separate car brand in partnership with Chery, it could create a conflict of interest between the existing JV and the new entity.
JSW to acquire additional stake
As of now, SAIC holds a 49% stake in JSW MG Motor JV. While JSW is in talks to acquire a part of SAIC’s stake, the company is also in discussions to buy stakes from other shareholders. One of the deals being negotiated is the 8% stake held by Everstone. JSW currently holds 35% and seems keen to increase its shareholding in the JV. With a majority stake, JSW will be in a better position to chart a successful path for MG in India.
As may be recalled, MG Motor started operations in India in 2019. SAIC had invested around $650 million initially. One of the key milestones was the acquisition of the General Motors’ plant in Gujarat. SAIC was aiming for further expansion in India, especially in the EV segment. However, after the border clashes in 2020, new investments from China were put on hold.
In 2024, SAIC sold a large portion of its stake in MG Motor India. It included a 35% stake sale to JSW. This deal was worth $300 million, boosting MG Motor India’s market valuation to $1.2 billion. The proceeds were transferred to SAIC and not invested back in MG Motor India. JSW MG Motor is currently focused on introducing multiple new EV models. Investments worth $240 million have been planned, although an approval from the government is awaited.
Even with the challenges, JSW MG Motor has emerged as a popular car brand, especially in the EV segment. MG is currently the second-largest electric car manufacturer in India in terms of sales volume. A significant percentage of MG sales in India come from the Windsor EV. MG has also introduced premium models such as the Cyberster and MG M9.
