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SAIC Motor may invest $350m in India

Feb 28, 2019 | Emerging Trends, India

SAIC Motor's takeover of British carmaker MG Motor made the latter's India operations a subsidiary of the Chinese firm.

China's largest automaker SAIC Motor Corporation, which is set to enter the Indian market next quarter with the Morris Garages brand, is considering an additional investment of $350 million in setting up a second manufacturing unit.

SAIC Motor's takeover of British carmaker MG Motor made the latter's India operations a subsidiary of the Chinese firm. MG Motor India has so far invested around Rs 2,200 crore to acquire General Motors' plant in Holland to develop a C-segment sports utility vehicle (SUV) for its debut in the country.

The company can produce 80,000 vehicles of larger make at Halol and would require a new unit for subsequent launches.

MG Motor India plans to launch four vehicles in the country over the next two years. The end of the year will take the final decision regarding the second unit.

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"It takes around two years to set up a new manufacturing unit," said MG Motor India president Rajeev Chaba told ET. "We have to decide on it (the second manufacturing unit) by the end of 2019. The location is yet to be decided."

The Halol plant is spread over 170 acres, with little room to expand at the location any further.

Also read: China's SAIC to ride MG into India

Meanwhile, MG Motor India is readying to launch SUV Hector, which will take on the likes of Jeep Compass and Hyundai Tuscon. This will be followed by electric vehicle eZS towards the end of the year. Two more vehicles will follow in 2020, according to people aware of the matter. The company is likely to steer clear of market leader Maruti Suzuki's turf and instead focus on SUVs in the initial years, they said.

The company has appointed about 50 dealer principals and plans to start operations with 100 sales and service touchpoints across the country, according to one person. MG Motor India is working with its dealer partners to put in place 250 touchpoints to be closer to its customers by the end of 2019.

Chaba said that being a new entrant, MG Motor India is making efforts to set the foundation right. Unlike its Korean rival Kia, which has set a target to sell 300,000 units within three years of launch, MG Motor India said it would sell 200,000 units annually in five-six years. "We will differentiate ourselves on technology, or connect with customers through community engagement programmes and the diversity of our workforce," said Chaba.

MG Motor India has recruited 900 employees and plans to add about 100 by the end of March.

Article Source: auto.economictimes

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