AUTO CHINESE AUTOMAKERS

MG’S GAME PLAN

EVs’ share of
Investment (` crore) Yearly sales (Units) Yearly capacity (Units)
total sales (%)

2017-22 4,000 48,000 70,000 12

2023-25 NA 100,000 120,000 30-35
2026-28 5,000 120,000+ 300,000 65-75
SOURCE Company

ment introduced a host of measures developments between India and holding [with the] majority to be
against Chinese businesses—the China since the Covid-19 pan- owned by Indians within two–four
banning of Chinese mobile apps demic’s outbreak have [created] years. The second phase involves
was emblematic of this. That ad- an anti-China sentiment. The gov- expanding our capacity with a new
verse climate also extended to in- ernment is increasingly turning plant. While we have a capacity of
vestments into automotive firms. the heat on fully-owned Chinese 120,000 units a year at our exist-
The most significant casualty was entities and wants them to have In- ing plant in Halol (Gujarat), it will
Great Wall Motor, which exited dian partners holding a majority,” [be] exhausted soon. Thus, we plan
the Indian market in 2022, just two Manish Raj Singhania, President of to set up a second plant at the same
years after its launch, citing its in- the Federation of Automobile Deal- location with an additional capacity
74 | ability to garner foreign direct in- ers Associations (FADA), tells BT. of 180,000 units a year,” says Chaba,
vestment as a reason. MG Motor received an addition- now CEO Emeritus of MG Motor In-
“In the passenger vehicles in- al blow in the form of a notice from dia. He adds that MG will invest “at
dustry, no approvals have been the Registrar of Companies under least `5,000 crore” that it estimates
given in recent times to Chinese the Ministry of Corporate Affairs to receive from the stake sale.
investments. Even the local auto in 2022, summoning its top brass, Given the growth MG has seen,
industry lobby is against a free run citing irregularities in its financials. the expansion is a necessity, feels
for Chinese automakers. Thus, it Chaba. In FY23, the company sold
was only prudent for MG to look for INDIAN ACCENT 48,866 passenger cars—21 per cent
Indian partners,” says a senior au- The company though is firm in its more than the 40,369 units sold the
tomotive industry executive. commitment to the Indian market, previous year and more than double
According to industry experts, and Chaba and his team have drawn the 21,954 units it sold in FY20, the
MG’s move to localise is more a up a plan to not just help the firm first full year of operations. Chaba
compulsion than a voluntary ex- survive in the world’s fourth largest now estimates that it will clock
ercise. “In India, MG Motor is the passenger vehicles market, but also sales of over 70,000 units in FY24.
established Chinese-owned pas- grab a larger share of the pie. According to MG, its indigenisa-
senger vehicles maker. But the “We plan to dilute our share- tion plan involves complete locali-

‘AS A GLOBAL LEADER IN EVs , WE WOULD DEFINITELY

LIKE TO GRAB A LARGER SHARE OF THE INDIA MARKET
AND WE WILL LAUNCH MORE MODELS’
SANJAY GOPALAKRISHNAN
SENIOR VICE PRESIDENT-EPV BUSINESS, BYD INDIA

Business Today 6 August 2023

 AUTO CHINESE AUTOMAKERS

sation. “When we say ‘Indianising stabilising our operations and dis- four–five models and that will take
the operations’ that includes every- tribution here. Globally, we are an the share of EVs in our total sales to
thing—like localising the technol- EV player and with our advanced 65-75 per cent by 2028. We also have
ogy. We are going to assemble the technology we want to increase plans to go public by then,” he says.
batteries from next year at Halol. awareness in India. Eventually, we Additionally, both automakers
A lot of important components like want to become a key player here. highlight the investments they have
cells that our industry currently im- BYD India is also a hub for BYD made as a reflection of their com-
ports will be made in India through South Asia and we have plans to mitment. According to Chaba, MG
joint ventures. For instance, we will export cars from here. We have has already invested `4,000 crore
explore local production of newer been operating in India as per local in India, while Gopalakrishnan says
technologies like Hydrogen fuel cell norms,” he tells BT, adding that the BYD has invested over `1,600 crore
that we have access to,” says Chaba. company has even sold electric bus- ($200 million). BYD is also plan-
es through its partner to the Indian ning to invest another $1 billion to
A DIFFERENT APPROACH authorities without much hassle. As manufacture EVs and batteries, re-
Localisation is one response to the the technology partner, BYD assem- ports say. However, other reports
prevailing conditions. Rival Chi- bles the chassis and the batteries suggest that the government may
nese auto major BYD that entered while its partner Olectra sells the e- not approve such a proposal.
the Indian passenger vehicles mar- buses to various state governments. According to experts like Har-
ket in 2021 presents a picture in The company has set a target ish Bijoor, Founder of Harish Bijoor
contrast. It has so far been unfazed of selling 15,000 EVs this year and Consults, the initial success of Chi-

76 | ‘WE WILL LAUNCH FOUR-FIVE MODELS AND THAT WILL TAKE THE
EV SHARE IN OUR SALES TO 65-75 PER CENT BY 2028.
WE ALSO PLAN TO GO PUBLIC BY THEN’
RAJEEV CHABA
CEO EMERITUS, MG MOTOR INDIA

by the challenges emanating from more than double its distribution nese car makers was due to their fo-
the tensions between the countries. network to 53 dealers. “EV sales are cus on developing the business and
Primarily focussed on the pre- growing rapidly in India and by 2030 establishing a reliable image rather
mium end of the market, with its it’s estimated to form 30 per cent of than creating too much noise like
two models priced above `30 lakh, passenger four-wheeler sales. So, as Chinese handset companies. “How-
its passenger vehicles operations a global leader in EVs, we would def- ever, given the nature of the rela-
in India are smaller than MG’s. Ac- initely like to grab a larger share of tionship between India and China,
cording to Sanjay Gopalakrishnan, the market and we will launch more the pressure on Chinese automak-
Senior Vice President of Electric models,” says Gopalakrishnan, add- ers will remain in the future. After
Passenger Vehicles (EPV) Busi- ing that BYD is planning to launch a all, the two economic powers in the
ness at BYD India, it has so far sold new model, Seal, in 2023. region are unlikely to come closer
some 2,200 electric four-wheelers Chaba, meanwhile, has larger anytime soon,” says Bijoor.
here. Given the smaller scale of its plans. With the Comet—a compact MG and BYD are hoping that
operations, the company is yet to two-door electric hatchback—he their strategies will insulate them
chalk out a plan to manufacture expects to garner 35 per cent of sales from any such pressures, should
components locally and is focus- from the EV segment by 2025. “As they arise.
sing on assembling its cars here. our next phase starts with the sec-
“Currently, we are focussed on ond plant, we will launch another @arndutt

Business Today 6 August 2023

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DIMINISHED
THE GOVERNMENT’S DECISION TO PARE
SUBSIDIES UNDER THE FAME II SCHEME LED
TO A MASSIVE DROP IN SALES OF EVs IN
JUNE. BUT WITH TALKS ON FOR EXTENDING
FAME AND OTHER MEASURES, THE INDUSTRY
HOLDS OUT HOPE FOR CONTINUED SUPPORT
BY CHETAN BHUTANI
AI GENERATED IMAGE BY VISHAL GHAVRI

VISIBLE 2015 2019

HAND
Centre launches FAME scheme to Government launches FAME
boost charging infra and provide II with a budget of `10,000
subsidies for electric and hybrid vehicles crore for three years

Business Today 6 August 2023