MG Motor India expects to turn profitable in 2023, aims to double its volumes

MG Motor India expects its operations to turn profitable next year as it looks to double its volumes with higher production capacity in place, the company's President and Managing Director Rajeev Chaba said on Monday.

The company, which has been impacted by acute supply chain constraints, is looking to close the current year with sales of around 55,000-56,000 units.

"Next year, we are looking at doubling our volumes. If we do 56,000 units this year and we are targeting over one lakh units in 2023. So that is why we think next year is definitely going to be a big year for us," Chaba told PTI in an interaction.

He noted that the company is in the final stage of completing capacity expansion at its Halol-based manufacturing plant in Gujarat which would help it scale up dispatches to dealers next year.

MG Motor had bought the Halol plant from General Motors and has been able to ramp the annual production capacity from 65,000 units to 1.25 lakh units now.

"Last year we sold around 40,000 units, this year it should be 55,000-56,000 units. So in 2023 hopefully the plant should be full and we should be profitable next year. So far we have been losing money and next year we should breakeven to some minimal profit," Chaba said.

He further said: "This is a big milestone for us and if we achieve that it will be within four years of our first launch in the country."

The company had introduced its first product 'Hector' in India in 2019.

Asked about the company's plans regarding a second manufacturing facility in the country, Chaba said the automaker is still in talks with various stakeholders. All options like having a new plant or some brownfield expansion or even contract manufacturing are being debated, he added.

"We wanted to make sure to take care of Halol capacity expansion first and because the auto industry remains influenced by the top three players, we need to be careful about capacity expansion. So we are taking a step at a time..So the focus is to fill the Halol capacity and become profitable," Chaba said when asked about the delay in finalising the second plant.
Volumes are important but at the same time it is necessary to have sustainable operations, he noted.

The company has so far invested over Rs 3,500 crore in the country.

On the company's product strategy, he stated that in the long term, the firm aims to be a reasonably big EV player.

"We believed in the EV story much earlier than other players, that is why we brought in ZS EV three years ago. Unfortunately due to shortages, we have supply constraints," Chaba said. He noted that the company's electric vehicle sales, with the launch of its second product in the segment -- an affordable EV -- in the April-June period next year, would help it ramp up overall sales.

"Hopefully this year our EV sales will be 70-80 per cent more than last year and 2023 it will be 70-80 per cent more than 2022, that's the growth we expect. After launching the second EV next year, 20-25 per cent of our sales next year hopefully should come from the EV segment," Chaba added.

The company remains more focussed on EVs than the conventional internal combustion models, he said.

"We are more focussed towards the EV because it is the future... So frankly speaking we are going to be biased towards EVs because we think it to be the future," Chaba said. And for that, the company believes in associating with all like minded partners and building the ecosystem, he added.

MG Motor India and its consortium members on Monday launched the fourth season of the MG Developer Program & Grant (MGDP).

This year's programme will focus on expanding the innovation platform for startups, developers, and innovators.

"MGDP Season 4 aims to facilitate a positive change in the industry by creating a space for EV innovators from across the country to collaborate and develop novel solutions. This is a platform that seeks to unite the best brains of the industry to come together with innovative ideas that have the potential to change the EV landscape," Chaba said.