China's SAIC Motor plans to drop its ownership in MG Motor India to allow domestic entities to take a majority stake, the Indian electric vehicle maker said on Wednesday, as Chinese investments face increased scrutiny by the New Delhi government.
MG also plans to invest more than 50 billion rupees ($611.4 million) to build a second plant in India amid a slew of other proposals, including exploring cell manufacturing, with the aim that at least 65% of its sales comprise of EVs from 2026.
While MG did not detail how or when SAIC would start lowering its stake, local media quoted MG managing director, Rajeev Chaba, saying the first step will be announced this year, with the aim to be majority owned by Indians in 2-4 years.
Two weeks back, local media reported that JSW Holdings Ltd, the financial arm of Indian conglomerate JSW Group, was in talks to buy a stake in MG. JSW denied the report.
MG did not immediately respond to a request for comment.
MG entered India in 2019 with plans to invest about $650 million. But New Delhi has sought to limit investments from Beijing after a 2020 clash between soldiers from the two countries on their disputed Himalayan border.
Last November, the government asked MG to explain why it posted a loss in 2019-2020, its first year of operations.
Nonetheless, MG, last month, launched its second electric offering and India's lowest-priced EV – the Comet EV – as it seeks to take on local market leader Tata Motors.
It now plans to launch four to five new vehicles, mostly electric.
MG also said it would look to turn profitable by 2025 and raised its annual sales target to 100,000 units from 80,000 earlier.
The company has a manufacturing facility in the western Indian state of Gujarat, with an annual production capacity of 125,000 vehicles.