MG Motor India: Supplies resume from China but facing hurdles from Italy

NEW DELHI: SAIC-owned MG Motor India said supplies of components have resumed from China but the company is facing disruption in sourcing parts from Europe due to the outbreak of coronavirus in the continent. The company, however, has not yet revised downwards production, sales and investment plans for calendar year 2020.

“Our supplies and production were impacted in February because of the outbreak of coronavirus in China. In March, the situation started improving…Now we are more concerned about Italy… (But) We are still optimistic, because of our bookings, we will be able to meet our annual target. We do not see any change in plans immediately,” said MG Motor India president Rajeev Chaba.

MG Motor India sources some auto parts and engines for diesel vehicles from Italy.

The company has pending orders for 16000 units of SUV Hector and 2000 units of MG ZS EV. The company has sold over 20,000 units of SUV Hector between July 2019 and February 2020.

MG Motor India has plans to invest Rs 2500 crore over two years to attain annual sales target of 100,000 units by 2021. The resources will be utilised expand production capacity at its manufacturing unit in Halol, Gujarat. The company also plans to launch two new vehicles – a high-end sports utility vehicle Gloster in the festive season of this year and a midsize SUV in 2021.

MG Motor India’s existing facility at Halol can produce 80,000 vehicles every year and fresh capacity would come in the from a second manufacturing unit. The company has plans to double sales volumes to 200,000 units by 2023.

“Once we open, we can ramp up very quickly. We now have the material. But the pace at which operations can normalise will also depend on our suppliers in India and the labour situation…The issues are more pressing in India at present”, said Chaba.

If the lockdown continues beyond April 14, 2020, however, the company would have to go back to the drawing board are re-examine plans, said Chaba.

Chaba said the measures announced by Finance Minister Nirmala Sitharaman and the Reserve Bank of India are a “good start,” but various tranches of support would have to come in from the government to alleviate the impact of the lockdown on the economy.

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