Grappling with challenges around its supply chain and production ramp up of its first car in the domestic market, the Hector, a sports utility vehicle (SUV), MG Motor India Pvt Ltd said that it is still evaluating the start of production of its BS VI compliant SUV.
Speaking to Mint on the sidelines of the opening of its first flagship showroom in South Mumbai on October 10, Gaurav Gupta, chief commercial officer, MG Motor India said, “We do have customer bookings to cater to and we are continuously reviewing our manufacturing plans. We are still evaluating the production schedules for BSVI compliant Hector as we are yet to take a decision on that."
The company said for now it is working to streamline its supply chain to be able to start off the second shift at its Halol-based manufacturing unit from November. “The priority is to keep the increasing wait list for customers in check," said Gupta.
The SAIC Motor Corp Ltd-owned carmaker claims that its current order book has more than 30,000 pending bookings for the Hector SUV. It has delivered little more than 6,000 units since the Hector’s launch in the last week of June.
Gupta said the second shift would grow the carmaker’s monthly manufacturing capacity from 2,500 units to up to 3,500 units. Although MG Motor says that the average waiting period is 3-4 months, the company-claimed numbers suggest otherwise.
The carmaker, which claims to be working to localize the Hector up to 75%, has been struggling to procure critical components that are imported from its global suppliers. Although MG Motor remains tightlipped on the matter, sources have suggested that the suppliers could not ramp up parts supplies in tandem with the initial booking numbers conveyed by the carmaker, thereby leading to serious supply chain issues.
“We have been talking to the suppliers in the backend because they have to increase their supplies. Some of our suppliers are global as some of them are based in Europe. Even as they expand their operations, this has to be supported with hiring of new workforce on ground for training. Once we got that clarity and assurance that we will be able to expand on time, we reopened bookings again," clarified Gupta.
Meanwhile, several carmakers have started preparing for the production of BS VI compliant models. Maruti Suzuki is leading the pack with eight BS VI compliant models already retailing at its showrooms. Other carmakers including Mahindra & Mahindra and Tata Motors have already drawn their respective production schedules for BS VI compliant cars and SUVs.
Gaurav Vangaal, country lead, light vehicle production forecasting, IHS Markit said, “MG Motor India should launch the BS VI compliant Hector by February next year as they are in the best position right now with ample bookings at hand and good demand for the Hector SUV. Most carmakers are moving to BS VI from Dec-Jan period and some of them have already moved lion’s share of their portfolio to BS VI. MG Motor will have to start rolling out BS VI models not later than February."
MG Motor India also plans to unveil its first electric car eZS in India in December later this year and start retails from January 2020. The MG eZS, a compact SUV, will be imported via completely knocked down (CKD) route and will be assembled at its Halol plant.