The Indian auto sector may be a formidable opportunity. The Chinese conglomerate SAIC, which owns MG Motor India, is the target of steel mogul Sajjan Jindal, who is creating a new firm to acquire Ford's Chennai factory after first purchasing a substantial portion of the latter. He is also in negotiations to licence Leap Motor's technology for the production of electric cars, a Chinese automaker, in the midst of all of this.
The plan has been in the works for about a year, and according to sources, an agreement between MG Motor and a company of Sajjan Jindal (for this venture) "looks imminent."
The media first revealed the discussions between Jindal and MG Motor India/SAIC in April. Now that the parties have decided to move forward with a contract, the talks are almost finished.
MG Motor views Jindal as a "best fit" partner because the latter is under tremendous pressure to secure funding in order to grow its operations in India. Though Jindal is now the front-runner, MG had also started talks with Hero Group, Reliance Industries, and Premji Invest.
The increased scrutiny on Chinese companies post the India-China border tensions has meant that MG is unable to get investments from its parent, while also facing difficulties in raising funds through other routes.