NEW DELHI: The Indian automobile market may be poised for significant growth. Steel tycoon Sajjan Jindal is forming a new firm. Through the new company, he will first purchase a substantial portion of MG Motor India, a division of the Chinese conglomerate SAIC, and then use that new company to acquire Ford’s Chennai factory. In the midst of all of this, he is also in negotiations to license Leapmotor’s technology for the production of electric cars with a Chinese automaker.
A contract between a company of Sajjan Jindal (for this venture) and MG Motor “looks imminent,” according to insiders, and the move has been in the works for about a year.
The talks between Jindal and MG Motor India/SAIC are apparently moving toward a contract, according to a story published by TOI in its editions dated April 25 of this year.
MG Motor views Jindal as a “best fit” partner because the latter is under tremendous pressure to secure funding in order to grow its operations in India. Though Jindal is now the front-runner, MG has also started talks with Hero Group, Reliance Industries, and Premji Invest.
Following the tensions along the India-China border, Chinese enterprises have come under more scrutiny, which has made it harder for MG to raise money through other channels and prevent it from receiving investments from its parent.
In his efforts to take on well-established Indian and international automotive businesses in the industry, Sajjan Jindal will have instant access to a multitude of technologies and vehicle platforms thanks to his alliance with MG and SAIC. “Sajjan Jindal is excited about the prospects with MG and SAIC, particularly when he gains a good grasp on the operations following the acquisition. In actuality, the nominee from the Indian firm might be named the MD of the newly formed company. Stated the sources.
According to the sources, Sajjan Jindal might initially acquire more than 30% of the business, with MG Motor and regional financial institutions and staff holding the remainder.
However, the Chinese company’s part will decrease in anticipation of a later planned IPO, in which the Jindal business will acquire a controlling interest.
“As previously stated, we are evaluating all options to grow our presence in the country and create a win-win situation for all stakeholders while keeping customers’ interests at the core,” an MG Motor India official said in a questionnaire on the subject. This would include implementing cutting-edge technology, improving localization, and maintaining the highest level of customer satisfaction in both the pre- and post-purchase phases. We won’t respond to the question because it is speculative. The JSW group declined to respond.
Ford Motors stated, “We continue to explore alternatives for the Chennai plant and have nothing further to add.” Ford Motors has sold Tata Motors the Sanand plant in Gujarat.