JSW Group likely to start buying into MG Motor in 2 months

JSW-MG Motor deal likely in two months

JSW Group may announce the acquisition of a stake in MG Motor India as early as in two months if the negotiations proceed successfully, and the first JSW electric car could roll out by next year, two people familiar with the development said, as quoted by Mint.

The deal 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. MG Motor India is expected to be valued at $1.2-1.5 billion, the report said.

“If the deal is finalised, 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, as quoted by Mint.

Moneycontrol could not independently verify this news development.

In case the talks with MG Motor fail, the group is working on a Plan B to partner with a foreign company, probably a Chinese one, to launch its products in India.

“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, as quoted in the report.

According to the first person, issues such as technology transfer for electric vehicles (EVs) still need to be resolved. “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 report added.

As a result of the rising trend in EVs, the JSW Group intends to enter the market. India's EV market, which was valued at $2 billion in 2023, is expected to triple to $7.09 billion by 2025. According to industry estimates, the number of EVs will increase from about 1.4 million as of August 2022 to 50 million by 2030. It is expected that the Indian EV market will reach 10 million units annually by 2030, according to the report.

There was no truth to the story, according to MG Motor India's spokesperson, who called it speculative.

“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 localise more components and become profitable. In the long run, we are open to the idea of collaborating with an Indian partner to localise more operations to be competitive for more volumes and mutual growth," an MG spokesperson said in an email response, as quoted in the report.

In addition to launching EVs, JSW Group is also in competition with Mahindra & Mahindra Ltd to acquire Ford India's Chennai plant. “Both Mahindra & Mahindra and JSW are contenders for the plant," the first person said, as quoted by Mint.

Ford's Chennai plant covers 350 acres and produces around 200,000 vehicles and 340,000 engines annually. Since July 2022, the plant has been shut down, and the state government is looking for a new buyer to restart production. The announcement can give both companies a boost in their EV plans, the report added.