MG Motor India Pvt Ltd is planning to raise up to Rs 5,000 crore in additional funds through external commercial loans (ECBs) or private equity, according to a report, after recently announcing a 69% increase in the first quarter of this year to the fourth quarter of 2021. According to a media outlet, the funds will be used to build a new manufacturing facility in India. The British motoring brand is currently preparing to launch new models in the country, including a mass-market electric crossover SUV. Sources further said that MG is looking at a car-making deal with another automaker in India, though talks are still in the early stages.
Rajiv Chaba, President and Managing Director, MG Motor India, said in an interview with a news outlet: . We should finish this exercise this year. ” The MG chief added, “We understand that this route will not require permission from the government under our Press Note 3 (PN3) rules.”
According to Chabaar, the growth of MG Motors in India could have been much higher if the laws surrounding new investments had not been so limited, adding that the shortage of semiconductors has also played a huge role in the slowdown of the brand in the country. .
In addition, due to PN3, which requires prior certification by the Government of India, the British carmaker, which is controlled by China’s SAIC Motor, is considering ECB or private equity as a solution to its lack of clearance for foreign direct investment (FDI). The ambition PN3 is effective when investment comes from a country that shares a land border with India. The need for PN3 arose after the escalation of border tensions with China.
MG’s goal of building a mass-market electric vehicle will be aided by the set up of this new manufacturing facility. The company has previously revealed that the new EV will be a crossover SUV priced between Rs 10 lakh and Rs 15 lakh, making it a direct competitor to Tata Nexon, India’s best-selling electric four-wheeler. The second facility will also help in the production of existing models like MG Hector, Aster, Gloucester and ZS EV.
As mentioned earlier, MG Motor India reported a 69 percent increase in the first quarter of this year compared to Q4 2021. The company sold 4,721 units in March 2022, but argued that the new COVID-19 version had a significant impact on supply chain constraints and the continued global shortage of semiconductor chips.
MG refrained from sharing the exact number of Hector and Astor sold in March, but both models reportedly sold more than 2,000 units and the best-selling model from the British carmaker’s portfolio in India. MG further claims that its new launch – 2022 ZS EV has received exceptional response from buyers across the country.