SAIC Motor confirms India entry

After evaluating various options to set up a manufacturing facility in India for over a year, China's largest carmaker SAIC Motor has confirmed its plans to enter this market, according to a company source.

SAIC will begin its India innings with the MG brand, the iconic British marque that was acquired by the carmaker over a decade ago. In fact, SAIC's Indian subsidiary is registered as MG Motor India and is headed by former GM India CEO Rajeev Chaba. The Chinese auto major is one of the few multinational auto companies to appoint an Indian CEO from the start.

Chaba is believed to have been chosen for this role in the early stages of this project as SAIC was impressed with him when he was vice-president, sales and marketing, for GM China, SAIC's joint-venture partner, from July 2011 to July 2013. Moreover, Chaba is the only CEO of GM India to have delivered a profit (in 2005-06) in the otherwise loss-making company. SAIC has also appointed P. Balendran, another GM India veteran, as executive director.

The plan is to sell all SAIC products in India with an MG badge. The first model is expected to roll out in 2019. However, SAIC would have access to products from other sister brands like Maxus and Roewe. There is a possibility to tap into the product portfolio of certain joint venture brands like Baojun as well.

Among the multiple brands in SAIC's portfolio, MG Motor India has a wide range of models and body styles to choose from which include hatchbacks, sedans, MPVs, SUVs, hybrids and even electric cars. However, SAIC is likely to initially focus on SUVs, given their current popularity in the country.

SAIC has been in talks with General Motors to take over its shuttered Halol plant in Gujarat but is yet to officially sign a formal agreement to acquire it. The deal came closer to fruition earlier this year when Competition Commission of India cleared the proposed acquisition. In a statement in April, SAIC said the company "continues to evaluate various options to set up a car manufacturing plant in India".

"SAIC's Halol plant deal is subject to GM's submission of all government approvals, settlement of labour and all other pending issues by GM," the statement added.

Once the plant's location is finalised, SAIC is likely to invest upwards of Rs 3,000 crore in the first phase to establish a strong footing with highly localised and cost-competitive products. "We are in India for the long term and are confident of establishing a strong presence in the market," said an SAIC official, on the sidelines of Shanghai Auto Show last April.