Armed with funding from its Indian joint venture partner JSW Group, Chinese automaker SAIC Motor’s India outpost, MG Motor India, will launch five new products in India over the next 12 months, starting with a festive season launch of a new crossover electric vehicle in September or October, a top company official said.
Rajeev Chaba, chairman emeritus, MG Motor India, said while three of the five upcoming launches will be in the ‘mass market’ category, two will be launched through a new premium channel.
The carmaker, which is also setting up a new factory in Halol in Gujarat, is targeting sales of 300,000 cars annually over the next three-five years, Chaba said.
“We should expand fast. As we speak, we are putting up our second plant in Halol, and are going to increase our capacity to 300,000 cars a year. And when you have 300,000 units in capacity, you need to have the products to fill the plant. So that’s our plan, in the next three-five years, we should have 300,000 cars”, Chaba told reporters on Tuesday.
“Our first launch will be a feature-loaded, intelligent crossover SUV designed for both comfort and utility”, he said.
Chaba acknowledged that growth in passenger vehicle sales had slowed in the first quarter of the ongoing fiscal year, but believes the industry has strong fundamentals and will see better growth in the coming quarters, especially with the upcoming festive season and new car launches.
However, he expressed concern about high dealer inventory levels, calling the situation a “bloodbath” for dealers.
The carmaker’s dealer inventory target
“MG’s dealer inventory is 35-40 days, which is lower than the industry average at 60 days, but we do need to further reduce it to under 30 days and re-energize the dealer network, also because we have to expand our dealer network to attract demand for the new products we are launching,” Chaba said.
Chaba is betting on a higher growth for the passenger vehicle market than the formal industry consensus of a low single-digit growth, outlined at the SIAM Looking Ahead conclave earlier in the year.
“I will bet on 7-8% growth for the industry rather than 2% or 3% growth. But because of the 3% growth we have seen last quarter, competition is cut-throat with no pent-up demand. And capacities have gone up every year. Management targets are up; every (original equipment maker) wants to do more than the industry. That has led to a stock build-up and dealers are the unhappiest lot right now,” he explained.
Chaba expects electric vehicle sales in the domestic market to grow 30% to 120,000 cars this fiscal.
The Comet EV, a two-door urban electric car, and the ZS EV, MG Motor India’s first electric vehicle in the country, are each clocking nearly a 1,000 units in sales every month, Chaba said.
MG Motor India is also hoping to achieve 50% domestic value-addition in the Comet EV, so it can claim incentives under the government’s production-linked incentive (PLI) scheme for advanced automotive technologies.
Chaba also argued that the taxation structure on passenger vehicles needs an overhaul, echoing views from some other sections of the industry that also advocate for a technology-agnostic taxation system, with graded tax slabs for vehicles based on their emissions and environmental friendliness.
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