SAIC to Invest ₹2,000 Crore in India Operations

• Published On: 13 September 2017
• 898 Views

The Chinese carmaker is currently in its final stages of acquiring GM’s factory in Halol.

Once SAIC fully takes over the Halol unit, decks will be cleared for the Chinese carmaker to enter India under the MG brand. SAIC will begin with an investment of ₹2,000 crore to upgrade the Halol facilities, and launch a wide range of MG products.

Rajeev Chaba, President and managing director of MG Motor India (the fully owned Indian subsidiary of SAIC), confirmed his company’s plans. “Our proposed investment is going to be over ₹2,000 crore in the first phase which will be needed to refurbish our Halol plant, which we are now on the verge of taking over. This investment will also be used to increase the plant’s capacity from the current 60,000 to 80,000 units, which we believe is sufficient to serve the Indian market for the next five years. I think we are quite sure of meeting the cost targets the way the Indian consumers want. In fact, I would like to believe this is going to be our strength in India. At SAIC, we have a very lean and very cost-effective manufacturing process with global quality. We export vehicles from SAIC’s joint ventures to Germany and America. So, in terms of cost and in terms of quality, I think we are world class there’s no doubt about that.”

SAIC is also planning an ambitious localisation programme, “We are committed to bringing a lot of suppliers from overseas and establish them within the Halol area and within our plant. That will also help in terms of inventory cost as well as localisation,” said Chaba.

The first model could have as much as 75 percent of local content, and this could rise to 90 percent beyond 2022, depending on production volumes.

When asked about which models will launch first, Chaba said, “Everything is on the table, in terms of shape and size. Luckily, we have a very good, compelling product range relevant to India. So, we are evaluating our first pick right now, but I can tell you that we will be very careful in choosing the relevant products for the market. We haven’t decided yet, but yes, we will launch two products in two years. Our first launch would be in 2019 and the second will be in 2020,” he stated.

The brands that the company owns include Maxus, Roewe and MG, while the joint venture with Wuling Motors has brands like Wuling and Baojun.