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Sajjan Jindal looking to get into Indian auto market, buys stake in MG Motor India
Industry News- Oct 28,23
Industrial tycoon Sajjan Jindal is orchestrating the formation of a new company with this stake and subsequently taking over Ford's Chennai factory through this new entity.
A significant development is underway in the Indian automotive market, potentially leading to a powerful new player. Industrial tycoon Sajjan Jindal is orchestrating the formation of a new company. His strategy involves acquiring a substantial stake in MG Motor India, a subsidiary of the Chinese giant SAIC, and subsequently taking over Ford's Chennai factory through this new entity. Concurrently, negotiations are active between Jindal and the Chinese auto company Leapmotor, aiming to secure a license for their electric vehicle technology.
This initiative, in progress for about a year, is on the verge of fruition, according to sources. The discussions between Jindal and MG Motor India/SAIC, which were first reported on April 25, have progressed significantly. Jindal is considered an ideal partner by MG Motor, as the company is facing challenges in securing funds for its expansion in India. Despite initial conversations with other entities like Reliance Industries, Hero Group, and Premji Invest, Jindal has emerged as the leading contender.
The heightened scrutiny of Chinese companies due to the India-China border tensions has made it difficult for MG to attract investments from its parent company. Jindal's partnership with MG and SAIC would provide him immediate access to a wide range of technologies and vehicle platforms, giving him a competitive edge against established players in the Indian and global automotive markets. It is anticipated that Jindal may initially acquire a stake of over 30% in the new company, with MG Motor retaining the majority share along with local financial institutions and employees. However, with a planned IPO in the future, the Chinese company's share will decrease, and the Jindal entity is expected to assume a controlling stake.
Furthermore, there are speculations that, following the deal, a nominee from the Indian company might be appointed as the Managing Director of the new entity, indicating Jindal's active involvement in the operations. When questioned about the matter, a spokesperson from MG Motor India stated that they are evaluating various options to enhance their presence in the country and ensure a mutually beneficial situation for all stakeholders. The spokesperson emphasised their focus on incorporating world-class technology, promoting localisation, and maintaining customer satisfaction in both sales and aftersales services. JSW Group declined to comment on the issue, while Ford Motors mentioned that they are exploring alternatives for the Chennai plant without providing further details.
Indian Auto Market
Sajjan Jindal
MG Motor India
SAIC
Ford Chennai Factory
Automotive Industry
Electric Vehicles
Leapmotor
Partnership
Business Expansion
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