MG India Contract Manufacturing Plan Mooted, Talks Held With VW, M&M

MG Motor India is in talks with other carmakers for contract manufacturing its vehicles by leasing out a facility in the country.

Volkswagen (VW) India and Mahindra-Ford joint venture are said to be the two firms that MG has reached out to at present as the Chinese-owned carmaker wants to increase its production capacity here.

Only two weeks ago we had found that MG plans to pump in Rs. 1000 crores fresh investment in India. While that amount was said to be for expanding its Halol plant and also to increase localisation in India, this new development has come out of the blue.

The move is said to have been taken since MG is a subsidiary of China’s SAIC and is facing increased government scrutiny due to the border tensions between the two most populated countries in the world.

It is said that the ideal choice for MG at present would be to lease the plant of Volkswagen since the Volkswagen Group and SAIC have strong ties already. It would also mean that the German brand would be able to make complete use of its facilities here.

In any case, MG India contract manufacturing plan seems unlikely to go ahead with M&M-Ford, partly due to SAIC and VW relations and partly due to Mahindra having no plans to lease out its facilities.

There is no doubt that MG is bullish about its presence in India and only time will tell if their travails pay off.