India's largest steelmaker JSW Group on Thursday entered into a joint venture with China's state-owned SAIC Motor to acquire a 35% stake in its Indian business, MG Motor India.

The key focus areas of the joint venture will be to pursue the development of the electric vehicle (EV) ecosystem in India and to take a leadership position in this space, the two companies say in a statement.

The shareholder agreements were signed by president of SAIC Wang Xiaoqiu and JSW Group's Parth Jindal at the MG Office in London.

"SAIC Motor and JSW Group will create strategic synergies by bringing together resources in the field of automobiles and new technology," the statement says. SAIC will continue supporting the joint venture with technology and products.

The joint venture will also undertake multiple new initiatives including augmenting local sourcing, improving charging infrastructure, expansion of production capacity, and introducing a broader range of vehicles with a focus on green mobility, the statement says.

The development comes six months after MG Motor India unveiled plans to become an Indian company in two to four years. The Indian government has tightened the noose around Chinese companies which are finding it hard to get funding via the foreign direct investment route. Investments worth $2 billion from two Chinese automakers, Great Wall Motors (GWM) and BYD, have already been rejected by India.

"In the growing Indian automotive market, both partners shall work closely to bring in the best of innovation, in creating greener and smarter mobility products and services for our consumers, seizing market opportunities, continuously expanding the brand influence and market share of our products, and achieving greater success for MG in India," says Wang Xiaoqiu, president of SAIC Motor.

MG Motor India is eyeing Ford's manufacturing facility in Chennai to significantly increase its production capacity. The company intends to launch 4-5 new cars, mostly EVs, and achieve 65-75% of its sales from the EV portfolio by 2028.

"Our strategic collaboration with SAIC Motor aims to grow & transform the MG Motor operations in India with a focus on green mobility solutions. The joint venture paves the way for bringing world-class technology-enabled futuristic suite of automobile products including the new generation of intelligent connected NEVs and ICE vehicles," says Parth Jindal of JSW Group.

"The JV's focus on broader localisation initiatives will yield financially accretive synergies through economies of scale while providing the highest level of customer service to the Indian consumer. One of the key focus areas of this joint venture will be to pursue the development of the EV ecosystem and to take a leadership position in this space," Jindal says.

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