MG Motor to go slow on capacity expansion despite strong demand

The firm, which is owned by SAIC Motor Corp. Ltd, also plans to introduce affordable electric vehicles in India, Chaba said in an interview.

MG Motor began its India operations in 2019 with the launch of its Hector sport utility vehicle. The company began its manufacturing operations after taking over the Sanand, Gujarat, plant of the US automaker General Motors, which can produce up to 80,000 vehicles a year.

Chaba said MG Motor does not plan to chase volumes in the initial years of its journey in India, and will instead work towards having a sound business structure.

“After four to five years, we can think of getting into the mass market segment like hatchbacks. Our next product, which will be an electric vehicle, will be able to take us a notch up," Chaba said.

Fuel-efficient and affordable hatchbacks as well as compact sedans especially from Maruti Suzuki India Ltd and Hyundai Motor India Ltd dominate India’s passenger vehicle industry.

MG Motor halted fresh bookings for the Hector after winning more than 28,000 orders by August within a month of its launch. The company can at present make 1,500 vehicles a month at Sanand, which it is in the process of expanding to 2,000 units.

Despite the strong demand, MG Motor would not accelerate its capacity expansion, and would restrict monthly vehicle production at up to 3,000,-3,500 vehicles until December, Chaba said.

In September, MG Motor posted retail sales of 2,600 Hector vehicles, a 29% increase from August.

The company is expected to launch its first electric vehicle e-ZS by the end of this year as its second product and collaborate with charging infra solution providers to set up charging stations in India.

MG Motor has a partnership with Delta Electronics India, under which Delta is to install AC chargers in private vehicle parking sites such as homes and offices. In July, MG Motor announced an alliance with Finland’s Fortum to install 50 kilowatt fast-charging stations on the premises of MG dealerships in five cities.