MG Motor India: Supply Resumes from China But Faces Hurdles from Italy



SAIC-owned MG Motor India said supply of components has resumed from China, but the company is facing disruption in sourcing parts from Europe due to a coronovirus outbreak in the continent. However, the company has not yet revised production, sales and investment plans for the calendar year 2020.

“Our supplies and production were affected in February due to an outbreak of coronavirus in China. In March, the situation started improving ... now we are more worried ..

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

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

MG Motor India plans to invest Rs 2500 crore over two years to achieve an annual sales target of 100,000 units by 2021. The resources will be used to expand production capacity at its manufacturing unit in Halol, Gujarat. The company plans to launch two new vehicles - Gluster, a high-end sports utility vehicle in this year's festive season, and an SUVS in 2021.

MG Motor India's existing facility in Halol can produce 80,000 vehicles every year and new capacity will come.

Once we open, we can ramp up very quickly. Now we have the material. But the speed with which operations can normalize will also depend on our suppliers and labor conditions in India… Currently the issues in India are under more pressure.

If the lockdown continues beyond April 14, 2020, however, the company will have to return to the drawing board, with plans to re-examine, the SBA said.

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