JSW MG Motor India, a joint venture between JSW Group and China's SAIC Motor, is actively pursuing significant manufacturing expansion, aiming to scale its annual vehicle production to an ambitious one million units while broadening its new-energy vehicle (NEV) portfolio.
Key Points
- JSW MG Motor India plans to significantly expand its Halol facility's annual capacity from 220,000 units to 400,000, with an ultimate ambition to reach one million vehicles.
- Discussions are underway between JSW Group and SAIC Motor for the next round of capital support to fund this ambitious expansion and new product development.
- The company is investing approximately ₹3,500 crore, supplemented by ₹2,500 crore from vendors, focusing on increased localisation and a multi-powertrain NEV strategy.
- JSW MG aims for 70-80% of its sales to come from New Energy Vehicles (NEVs), including BEVs, HEVs, PHEVs, and EREVs, and advocates for differential taxation to accelerate their adoption.
- SAIC views India as its next major growth market, leveraging the JSW partnership for localisation and market navigation, with the easing of Press Note 3 restrictions potentially opening more investment avenues.
The JSW group and China's SAIC Motor are discussing the next round of capital support for JSW MG Motor India as the automaker looks to expand manufacturing beyond the 220,000-unit annual capacity already planned at its Halol facility and widen its new-energy vehicle (NEV) portfolio.
The company, which is investing around Rs 3,500 crore in capacity, localisation and new products, ultimately sees scope to expand the Halol facility to around 400,000 vehicles annually.
Beyond that, JSW MG has an ambition to scale to one million vehicles, Parth Jindal, director, JSW MG Motor India, said on August 26, Wednesday.
Funding Future Growth and Expansion
"We really want to go beyond 220,000, which is not enough for MG with the way the market has received us. We are very excited and we want to scale to 400,000 and then get to a million cars. And for that you will need capital," Jindal said.
JSW currently owns 35 per cent of JSW MG Motor India, while SAIC holds 49 per cent. The remaining equity is held by Indian financial institutions, dealers, and employees.
The existing Rs 3,500 crore investment programme is being funded through a mix of debt and equity, including funds remaining from JSW's original investment in MG.
However, expansion beyond the currently approved programme will require the shareholders to decide on the next round of funding.
"The discussions between both shareholders are well underway," Jindal said, while declining to comment on whether the talks could result in a change in their respective shareholdings.
He added that the recent easing of restrictions under Press Note 3 could open more avenues for SAIC to invest in the Indian venture. Both shareholders remained keen to support the business, he said.
Under Press Note 3, investments in Indian companies from entities based in countries sharing a land border with India, including China, require prior government approval.
As growth matures in China and Europe, SAIC views India as its next major growth market, with its JSW partnership providing a crucial edge in localising operations and navigating the Indian market.
Capacity Increase and Localisation Efforts
The expansion comes as MG targets another sharp increase in volumes. Jindal expects the company to surpass 95,000 vehicles in calendar year 2026 (CY26) and target the 100,000 unit milestone, up from approximately 70,500 vehicles in CY25.
"Our aim is to continue to grow our volumes 35-40 per cent," he said, adding that increased localisation would also be critical to improving profitability.
Capacity at Halol is currently around 110,000 units annually. Jindal said this would increase to 160,000 units by March 2027 and 220,000 units by January 2028.
The company has completed master planning that would allow the same site to eventually produce around 400,000 vehicles annually.
Jindal said the company does not see the need for another manufacturing location for at least the next three to four years.
A decision on another plant could be considered when volumes move beyond roughly 250,000 units, he added.
The company's own Rs 3,500 crore investment is being supplemented by about Rs 2,500 crore of investment by its vendors, taking the overall investment associated with the expansion to around Rs 6,000 crore, Jindal said.
Localisation will be a key part of this expansion. The company is targeting around 70 per cent localisation for both the Windsor and the newly introduced Hector Tomahawk by the end of CY27.
ADAPT Platform and NEV Strategy
MG's next phase of growth will also be anchored by ADAPT -- Advance Drive Architecture Platform Technology -- its modular multi-new-energy vehicle architecture.
The platform can support battery electric vehicles (BEVs), hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and extended-range electric vehicles (EREVs).
Anurag Mehrotra, MD, JSW MG Motor India, said, "The multi-powertrain strategy was aimed at addressing different consumer needs, particularly buyers who want the running-cost benefits of an EV but also undertake longer journeys."
MG plans to use ADAPT for EVs and PHEVs, and is also evaluating EREVs.
In an EREV, the wheels are driven only by the electric motor, while a smaller internal-combustion engine acts as a generator to recharge the battery, reducing range anxiety.
"EREV is definitely something that we would like to bring. We can bring it, and we want to bring it," Jindal said.
Jindal also pitched for differential taxation for such new-energy technologies. While pure EVs attract 5 per cent goods and services tax (GST), PHEVs are taxed at 18 per cent or 40 per cent, depending on vehicle size and engine specifications.
He said the government's approach appeared to distinguish between vehicles where the engine can directly drive the wheels and EREVs, where it only generates electricity.
Jindal said lower taxation could accelerate adoption of PHEVs and EREVs, while acknowledging that they need not necessarily receive the same 5 per cent rate as pure EVs.
"Then don't make it 5 per cent, make it 18 per cent, no problem... But the consumer should get it cheaper," he said.
While MG will continue selling ICE vehicles, NEVs will remain at the centre of its growth strategy.
Mehrotra has previously said the company expects NEVs to account for around 70-80 per cent of its sales, with multiple powertrain technologies required to expand the addressable market.
