JSW MG Motor India is accelerating its localisation strategy and expanding investment plans as it prepares for a broader rollout of electric vehicles (EVs), hybrid models and premium offerings in the Indian market, while reports indicate that partner SAIC Motor is set to further reduce its shareholding in the joint venture.

According to JSW MG Motor India Managing Director Anurag Mehrotra, localisation has become one of the company's priorities as it seeks to increase local content, address supply-chain considerations and support its operations in India's new energy vehicle market.

The company has already increased localisation levels for the Windsor electric crossover and is implementing a broader localisation programme across its portfolio. Current localisation levels stand at 61% for the Comet EV and more than 50% for the Hector.

"We almost tripled the localisation levels in Windsor and there is now board approval for further investment to a very large degree to get the localisation levels up to about 70-odd percent. For existing products as well as for any new model that we bring, the starting point will be 70%," Mehrotra said.

He further added that the company's objective is to achieve localisation levels of at least 70% across both existing and future products. The localisation drive comes as the automaker prepares to launch several new products over the coming years. The company, a joint venture between India's JSW Group and China's SAIC Motor, focuses on new energy vehicles, with electric and hybrid vehicles expected to account for 70-75% of its total sales over the next five years.

During the last financial year, the company introduced the Windsor Long Range, M9 luxury MPV and Cyberster electric sports car. It also unveiled the Majestor SUV and plans to launch three to four additional products this year, including one model through its MG Select retail channel.

Mehrotra stated that localisation has gained additional importance due to global supply-chain uncertainties and geopolitical developments.

"Being more self-reliant and having higher levels of localisation is our mitigation plan for supply chain resilience," he said.

While battery-pack assembly is already conducted in India, battery cells and certain advanced electronic components continue to be imported. The company is working with suppliers to increase local sourcing and facilitate technology-transfer agreements related to domestic manufacturing.

To support these efforts, JSW MG Motor India is expanding its engineering resources. The company currently employs more than 120 engineers and plans to increase both manpower and infrastructure over the coming years. The automaker is also investing between Rs. 30 billion and Rs. 40 billion (US$ 315.4-420.5 million) in product development, localisation programmes and manufacturing expansion. It recently approved an expansion of its Halol manufacturing facility in Gujarat, which will initially increase annual production capacity to approximately 160,000 units, with further expansion planned at a later stage.

Mehrotra also indicated that the company is assessing potential opportunities for collaboration within the broader JSW Group. While there are currently no shared engineering, sourcing or manufacturing operations with other automotive businesses within the group, he said that potential synergies would be evaluated as new products and capacity investments are implemented.

According to Mehrotra, several JSW Group companies already participate in supplier programmes, although any future collaboration would need to comply with regulations governing related-party transactions.

"Whatever synergy can be achieved, will be achieved," he said.

At the same time, media sources reported that SAIC Motor is preparing to sell an additional 10% stake in JSW MG Motor India to JSW Group. According to sources familiar with the discussions, the transaction would increase JSW Group's shareholding from 35% to 45%, making it the largest shareholder in the company, while SAIC's stake would decline from 49% to 39%.

SAIC currently holds a 49% stake after reducing its ownership in 2023 to bring in Indian investors amid increased scrutiny of Chinese investments by the Indian government. According to media sources, discussions between the two parties are ongoing, and the transaction could be completed within a month. One source stated that SAIC has agreed to the proposal, while another indicated that the transaction would provide JSW Group with a larger ownership stake and increased involvement in the business.

Neither SAIC Motor, JSW Group nor JSW MG Motor India responded to requests for comment from media sources. The value of the proposed transaction has not been disclosed. However, when JSW acquired its initial 35% stake in 2023, the unlisted joint venture was valued at approximately US$ 1.2 billion.

Media sources further reported that SAIC intends to reinvest approximately Rs. 6 billion of the stake-sale proceeds into the joint venture. The funds are expected to support future product launches, including extended-range electric vehicles and hybrid models, without altering SAIC's remaining shareholding.

The latest development follows discussions reported last year regarding a larger stake sale by SAIC to JSW Group. Those negotiations were reportedly delayed due to differences over valuation.

JSW MG Motor India continues to operate in the Indian automotive market, particularly in the EV segment. The company is currently India's second-largest EV manufacturer, with sales growth driven largely by the Windsor EV. However, media sources noted that the company's losses have widened as competition has intensified, particularly with rivals such as Mahindra & Mahindra increasing their share of the electric passenger vehicle market.

The company has previously announced plans to invest up to US$ 418 million in India to support new product introductions and increase annual production capacity to 300,000 units. SAIC entered the Indian market in 2019 with plans to invest more than US$ 650 million. However, media sources reported that the company has faced challenges in bringing additional capital into India following the Indian government's decision in 2020 to tighten investment regulations for neighbouring countries.

Chinese EV manufacturer BYD has reportedly encountered similar challenges. Media reports indicate that BYD's proposed US$ 1 billion investment plan for manufacturing operations in India has yet to receive government approval.

Although India and China have shown signs of improving diplomatic and business relations in recent months, media sources reported that India continues to maintain restrictions on Chinese investments in the automotive sector.