SAIC Signs MoU with Gujarat Government to Acquire Halol Plant

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SAIC is aiming to roll out 50,000 to 70,000 units from its Halol plant; will investment around Rs. 2,000 crore and employ 1,000 workers

Shanghai Automotive Industries Corporation (SAIC) announced recently that it would enter Indian market through its fully-owned British marque, MG Motors. Leading up to the big launch in the next two or three years, the Chinese firm has now signed a Memorandum of Understanding for its own production facility with the Gujarat government.

As we reported earlier, this will effectively mean that the recently closed plant of General Motors in Halol, Gujarat will be utilised for rolling out SAIC’s MG branded cars. The government running the state of Gujarat has given green light to SAIC to facilitate approvals and registration ahead of the brand’s market entry.

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As part of the MoU, SAIC will act as an employer to around 1,000 people in the Halol plant. Initially, it will be investing a sum of Rs. 2,000 crore in its domestic operations. Moreover, as much as five Chinese suppliers will be establishing their factories around Halol and it will provide additional employment. They are cashing in a total of Rs. 1,000 crore as well.

SAIC is yet to announce the models the MG brand will offer for India but those information will be revealed as we near its market debut. About 50,000 to 70,000 units are planned to be produced in Halol from 2019 onwards and the facility could be used as an export hub as well.

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Taking advantage of GM’s exit from the end of this year, SAIC will have a tough task ahead in building reputation at the local automotive community that is largely dominated by Maruti Suzuki. MG’s affordable vehicles with fuel efficient powertrains are expected to form the main base for its operations while taking aggressive strategic steps can sometime prove to be crucial for the growth.