Indian steel tycoon Sajjan Jindal is said to be creating a new firm by buying a stake in MG Motor India, a subsidiary of China’s SAIC, and acquiring Ford’s Chennai factory.
The Indian auto market may soon see a significant shift. Steel tycoon Sajjan Jindal is forming a new company, starting by acquiring a major stake in MG Motor India, a subsidiary of Chinese giant SAIC, and then taking over Ford’s Chennai factory. Concurrently, Jindal is negotiating with Chinese auto firm Leapmotor to license their electric vehicle technology.
This strategy has been under development for about a year. According to sources, a deal between Jindal’s entity and MG Motor is nearing completion. MG Motor views Jindal as an ideal partner, especially as they struggle to secure funds for their Indian expansion. While MG had discussions with Reliance Industries, Hero Group, and Premji Invest, Jindal has emerged as the primary contender.
Due to heightened tensions between India and China, MG has faced challenges in obtaining investments from its parent company and other sources.
For Jindal, collaborating with MG and SAIC offers immediate access to a wide range of technologies and vehicle models. This positions him well to compete with established automotive giants in India and globally. Sources indicate Jindal’s enthusiasm about the partnership, suggesting that a representative from his company might be named the MD of the new venture.
It’s believed that Jindal might initially secure over a 30% stake in the company, with MG Motor retaining the majority. However, a future IPO could see Jindal’s entity gaining a controlling stake.
Responding to inquiries, an MG Motor India spokesperson mentioned their ongoing efforts to expand in India and declined to comment on the speculation. JSW group also declined to comment. Ford Motors, having previously sold its Sanand plant in Gujarat to Tata Motors, stated they’re still considering options for the Chennai plant.