JSW's tie-up with MG Motor is a shot in the arm for India's fledgling electric vehicle industry
SAIC Motor and JSW Group finalise automotive JV ‘JSW MG Motor India Pvt Ltd’.JPG( (L-R- Mr Rajeev Chaba, CEO Emeritus of MG Motor India, Mr Sajjan Jindal, Chairman of JSW Group, Mr Parth Jindal, Member of Steering Committee of JSW MG Motor India JV)
If you can’t build it, it’s best to buy it. That’s the philosophy the JSW Group has adopted in entering India’s rapidly growing car market.
After months of negotiations, the company said it would enter into a wide-ranging tie-up with MG Motor to manufacture, market and distribute vehicles both for the Indian market as well as for exports. JSW will have a 35 percent stake in the joint venture. Crucially, the company gets access to MG Motor’s new powertrain technologies. It will also work towards setting up charging infrastructure across the country. Under the terms of the deal, JSW MG Motor India Pvt Ltd plans to launch a new vehicle every three to six months starting from the 2024 festive season.
JSW’s entry into the auto market comes at a time when the $23 billion conglomerate is reshaping itself from a commodity player in steel, cement and energy to more consumer facing businesses like its recent entry into the paints business. The auto industry, it believes, is on the cusp of a significant change that should play out this decade.
“India is a $4 trillion economy today, while China reached that level in 2005 and the US in 1985,” said Parth Jindal, member of the steering committee of JSW MG Motor India Pvt Ltd. According to him, this is about the point when auto sales begin to take off and, just as China went from 4 million passenger vehicles in 2005 to 28 million today, India too could move from 4 million to 10 million by the end of this decade. He expects electric vehicles and hybrids to form a significant chunk of sales by then. “The focus will be on new energy vehicles,” he said, and added that the aim was to sell 1 million electric vehicles by 2030.