China’s SAIC Motor is reportedly preparing to divest an additional 10% stake in its Indian joint venture, JSW MG Motor India, to its local partner JSW Group. According to sources cited by Reuters, the transaction would increase JSW’s shareholding to 45%, making it the largest individual shareholder in the company, while SAIC’s stake would reduce from 49% to 39%.
The proposed deal comes as SAIC continues to navigate challenges related to India’s foreign investment regulations, which have constrained its ability to inject fresh capital and expand operations in the country. These restrictions have remained in place despite the automaker reducing its ownership and bringing in Indian partners, including the Sajjan Jindal-led JSW Group.
Sources familiar with the matter indicated that discussions are at an advanced stage and the transaction could be completed within a month. The move is expected to provide JSW with greater operational oversight and strategic influence over the business. However, neither SAIC Motor, JSW Group, nor JSW MG Motor India has officially commented on the reported development.
While the financial details of the transaction remain undisclosed, JSW acquired its initial 35% stake in the company in 2023 when the unlisted venture was valued at approximately $1.2 billion. One source suggested that SAIC may reinvest around ₹600 crore ($63 million) from the proceeds into JSW MG Motor India to support the launch of new products, including extended-range electric vehicles and hybrid models, without altering its remaining shareholding.
The latest development follows earlier discussions between the two partners, which reportedly began last year, regarding a larger stake sale by SAIC. Those talks did not materialize at the time due to differences over valuation.
JSW MG Motor India has emerged as the country’s second-largest electric vehicle manufacturer and has outlined ambitious expansion plans. The company previously announced intentions to invest up to $418 million to introduce new models and more than double its annual production capacity to 300,000 units. Sales have received a significant boost from the success of the MG Windsor EV, although rising losses and increasing competition from domestic rivals, particularly Mahindra & Mahindra, have intensified pressure in the EV segment.
SAIC entered the Indian market in 2019 with plans to invest more than $650 million. However, those ambitions were impacted after India introduced stricter scrutiny of investments from neighboring countries in 2020. Similar challenges have affected other Chinese automakers, including BYD, which has yet to secure approval for its proposed $1 billion investment in India.
Although diplomatic and economic relations between India and China have shown signs of improvement in recent months, with New Delhi easing investment approvals in select sectors such as electronics manufacturing, restrictions on Chinese investments in the automotive sector largely remain in place.
