MG Motor in talks with Volkswagen India, Mahindra-Ford JV to manufacturing contract.

 The source added that "in all likelihood, an agreement between SAIC and Volkswagen internationally is more likely, given the current strong relationship with the Volkswagen Group."

 

 

MG Motor is in talks with Volkswagen as well as the Mahindra-Ford JV to lease its plants to manufacture its cars in India. The move comes as the company - a British brand but a subsidiary of China's SAIC - faced government scrutiny in the wake of border tensions between India and China, especially when it comes to new investment plans. 

 

Highly placed sources told TOI, "Negotiations have begun, and MG - which is manufacturing cars at its facility in Halol, is now sourcing vehicles from other companies." "The talks are not accidental. This is a serious conversation, ”the sources said.

Negotiations were initiated with both the Volkswagen Group - which are the Chinese and European partners of SAIC and MG Motor - and also with the Mahindra-Ford JV. “It needs to be seen how deep the synergy is. The two companies have been negotiated separately. In the end, MG Motor will only go with one partner, ”one of the sources said.

The source added that "in all likelihood, the agreement with the Volkswagen Group is likely strong given the strong international relations between SAIC and Volkswagen internationally." “Volkswagen is serious about joining hands with MG Motor in India. This enables them to expand their international relations for India, as well as help them to utilize passive production capacity in their India factories. "

When contacted, MG Motor Company did not respond to a detailed questionnaire. A spokesperson for the Volkswagen Group in India said, "We do not comment on market speculation." A spokesperson for the Mahindra group said, "There are no plans for a construction contract for MG Motor."

MG Motor started business in India by buying the Halol (Gujarat) plant of General Motors of India. The plant has an annual capacity of 1 lakh units, which is more than the current requirement of MG motor. Sources said, "MG has seen a strong growth rate despite Chinese descent in India."