China’s SAIC Motor, one of the nation’s largest state-owned automotive companies, is set to significantly reduce its 49% stake in its Indian joint venture with JSW Group, according to sources familiar with the matter. The decision comes as the venture, JSW MG Motor, continues to face financial losses and regulatory challenges exacerbated by political tensions between China and India. SAIC will cease further investment in the venture but will continue to supply technology and products. The move underscores the broader impact of geopolitical friction on business operations, particularly after India imposed restrictions on Chinese investments in 2020 following a border standoff. Despite recent diplomatic efforts to ease tensions, progress in business relations remains stagnant. JSW Group has proposed acquiring most of SAIC’s stake to become the majority shareholder, but disagreements over valuation have stalled negotiations. Additionally, JSW’s pursuit of a partnership with Chinese automaker Chery to develop its own-brand vehicles has further strained relations with SAIC. The venture, valued at $1.2 billion, has struggled to meet expectations despite its growth in India’s electric vehicle market, where it ranks second behind Tata Motors. The Indian government is currently reviewing a $240 million investment proposal from JSW MG Motor for EV manufacturing, with concerns over the repatriation of profits to China adding complexity. As competition in India’s auto market intensifies, particularly with Tesla’s recent entry, the future of SAIC’s presence in the region remains uncertain.
China’s SAIC to cut stake in India car venture amid investment curbs, sources say
