For MG Motor India, the Chinese parental tag has been a drag

Was SAIC a bad word?

Thus, every press release that came from MG Motor India had the words “MG Motor India, an iconic British automobile brand…” MG stands for Morris Garages and this British brand is now owned by SAIC Motor of China. So why would MG Motor India never mention SAIC in its press releases? Like I said, it’s obvious. China is a bad word in India, especially since the time the Modi government has been in power, our political relationship with China has deteriorated terribly. For that China needs to take the blame. Its illegal incursions into our territory, some of its dubious business practices in India, its dangerous apps, etc prompted a series of tough decisions from the Indian government. Hundreds of apps that originated from China have been banned, some Chinese businesses have been asked to wind up and leave and politically we are very wary of our powerful neighbour. So is China all that bad as it is made out to be?

Yes, to some extent, but no to a great extent. If you recall, the tagline of the Indian government owned Steel Authority of India (SAIL) is “There’s a little bit of SAIL in everybody’s life”. For China, I can confidently say, “there’s quite a bit of China in all our homes and offices”.

If you carefully scrutinise the products we have at home, whether it is our refrigerators, our computers, our television sets, our cars, our scooters and bikes, our washing machines, our kitchen items, the clothes we wear, etc , the probability of a Chinese component present in them, is very high. We cannot deny the existence of Chinese products in our lives. Chinese products  are in abundance in our homes and offices.

After the breakdown of India-China relations, several investments that were to come to India from China dried up. The Great Wall Motor Company Limited, China's largest SUV and pickup manufacturer, selling over a million SUVs a year and realising $15 billion in annual revenues, cancelled its big ticket investment in India. There were other investments too that fizzled out.

In the midst of all these tensions, I think it was prudent on the part of MG Motor India not to tom tom about its Chinese partner. Rajeev Chaba who heads MG Motor India, with his decades of experience in the automobile space, seldom mentioned SAIC in his conversations or speeches. The press releases from the company too, kept the SAIC word out.

SAIC Motor, a major automobile company

But as a journalist I feel it will be very unfair if I did not mention a bit about SAIC Motor and how successful it is as a global auto major. 

SAIC Motor Corp., Ltd. (formerly Shanghai Automotive Industry Corporation) is a Chinese state-owned automobile manufacturer headquartered in Shanghai. SAIC Motor is currently the largest auto group in China. The company's business mainly covers vehicles, auto parts and components, mobility services, finance, overseas business, etc. SAIC Motor has an annual revenue of $120.9 billion.

SAIC Motor’s joint ventures include SAIC Volkswagen, SAIC-GM, and SAIC GM-Wuling. The company as a whole sold 5.30 million cars in 2022. To put that in the right perspective, in India, our entire domestic sales of passenger vehicles that included passenger cars, utility vehicles and vans stood at 3.89 million in the financial year 2022-23, according to the Society of Indian Automobile Manufacturers (SIAM). The industry exported another 6.62 lakh in the same period.

SAIC produces and sells vehicles under its own branding, such as Feifan, IM, Maxus, MG, Roewe, Baojun, Wuling and several others.

Indianising MG Motor India

Now MG Motor India wants to Indianise its business operations. That will definitely have a nice ring to the brand. Since SAIC will part with its majority shareholding in MG Motor India, it will then be known more by the Indian brand that purchases a majority stake. The company is in advanced stages of negotiations with several Indian companies like Reliance, Hero Group, Premji Invest and JSW Group for an equity sale. The deal is likely to be signed by end 2023 and the takeover is expected in a phased manner.

Post the deal, MG Motor India may stop emphasising the fact that it is an iconic British automobile brand. It could change to a “Reliance owned…” or a “Premji  owned…” company. At least then it would be able to shrug off its Chinese parentage and proclaim itself a full-fledged Indian company. Whatever the outcome, one cannot do away with SAIC of China. For MG Motor India to grow, it will always need a lot of critical inputs from China’s SAIC, be it product development, new technology, new platforms, new fuel run vehicles, etc. None of the current suitors for MG Motor India has any expertise in this area, except the fact that they may all have deep pockets and an Indian name to boot!

SAIC of China will always be the real daddy with the know-how. We might as well acknowledge its presence and the very critical role that it will play for all times to come!

Roy Punnoose Tharyan is a “born again” auto journalist who wants more truth to prevail in the field of automotive journalism.  He has more than 35 years of journalistic experience in the fields of business, economics and automotive, both B2B as well as B2C. He is an avid photographer, videographer and has mastered the skill of video editing. He does not believe in automotive awards and boring seminars. He is also the Founder Editor of Motown India