Home / Companies / News /  MG Motor strengthens India leadership

NEW DELHI : The local subsidiary of China’s SAIC Motor Corp., MG Motor India Pvt. Ltd, has initiated a major overhaul in its top leadership, signalling its intent for long-term commitment to the market amid heightened scrutiny of foreign direct investments (FDI) from China.

MG is the only Chinese original equipment manufacturer to set up a facility in India after debuting with its sport utility vehicle MG Hector in 2019.

While president and managing director Rajeev Chaba is the mainstay of the leadership team in India, MG appointed former Renault Nissan executive Biju Balendran as its chief operating officer in September, replacing SAIC’s key decision-maker, Wensheng Tang, two people in the know said, seeking anonymity.

MG has also named Vishwas Deshpande as a replacement for Vikas Varma, who is set to retire as director of purchase. Deshpande, a veteran in sourcing and automotive supply chain, is currently serving as vice president of LCV operations, sourcing and supply chain at Ashok Leyland. He is likely to join in December. Deshpande also had stints in General Motors and Tata AutoComp Systems.

“Balendran is being brought in as Tang’s three-year term was up. In the case of Varma, the change comes in view of his retirement. MG is not really taking active steps to remove anyone, but the company’s decision to recruit an Indian COO, while the usual practice in other markets is to replace a Chinese high-level executive with another Chinese executive, is strategic. Bringing in a sourcing head known to be aggressive, is a signal to all stakeholders in India that the company is committed to the market for the long-term," said a senior industry executive, one of the two people.

MG Motor India declined to comment when contacted.

The automaker’s manufacturing unit in Halol, Gujarat, currently has an annual capacity of 125,000 units. It has been looking to more than double its capacity to 300,000 units with investments upwards of 4,000 crore. It is also exploring funding options to implement its expansion plans, considering that SAIC’s fund infusion plan via the FDI route may face scrutiny. New Delhi had halted clearances to close to $2 billion in China-origin products following a military standoff with Beijing in 2020. In July, China’s Great Wall Motor had to shut shop after failing to get the Centre’s clearance for its $1 billion FDI proposal.

“MG is sailing through via loans, but it will need investment from SAIC. It’s a matter of time how they’re able to do this," the executive added.

MG Motor aims to sell close to 30,000 electric vehicles in 2023, including the MG ZS EV and an affordable SUV, which is expected to be launched in the first quarter of FY23. The new model lines will also require investment.

ABOUT THE AUTHOR

Alisha Sachdev

Alisha Sachdev is an assistant editor with Mint based in Delhi. She reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies. She also focusses on developing multimedia properties for Mint and currently hosts the 'In A Minute' series and the Mint Primer podcast. Previously, she has worked with CNBC-TV18 and NDTV.
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