Quick HighlightsSAIC is negotiating to sell its 49% stake in JSW MG Motor India due to regulatory and valuation challenges.JSW may acquire majority control as it looks to buy SAIC’s stake and other minority holdings, including Everstone’s 8%.Chery Automobile talks with JSW add complexity, given Chery and SAIC are rivals in global and Chinese markets.MG Motor India, despite hurdles, is the second-largest EV manufacturer in India , with strong growth in models like the Windsor EV.SAIC Plans 49% Stake Sale in JSW MG Motor India Amid Investment CurbsChina’s state-owned automaker SAIC Motor is reportedly preparing to reduce its stake in JSW MG Motor India by a significant margin, according to a Reuters report. This development comes against the backdrop of India’s regulatory restrictions on fresh Chinese investments following the 2020 border tensions. SAIC, which currently holds a 49% stake in the joint venture , is in talks with its partner JSW Group , which is expected to acquire the stake and emerge as the majority shareholder.Negotiations Face Valuation HurdlesThe stake sale discussions between SAIC and JSW have reportedly hit a roadblock, with both parties yet to agree on the valuation of SAIC’s shares . While JSW is keen to buy out SAIC’s stake, differences over pricing are delaying progress.Adding complexity to the matter, JSW is simultaneously in advanced talks with China’s Chery Automobile to create a new car brand independent of MG Motor India. If finalized, Chery will act as a technology partner in JSW’s new automotive venture. This move is particularly sensitive, as Chery and SAIC are direct competitors in both domestic and global markets.Potential Conflict of InterestThe potential collaboration with Chery Automobile has raised eyebrows, given the rivalry between SAIC and Chery . While SAIC enjoys a larger global footprint, Chery has been expanding rapidly in both domestic and export markets. JSW’s decision to work with Chery for its new entity could create conflict of interest issues with the existing MG Motor JV, adding another layer of complexity to SAIC’s exit strategy.JSW’s Path to Majority OwnershipCurrently, JSW Group holds 35% in MG Motor India , while SAIC owns 49% . Other minority stakeholders include private equity firm Everstone , which holds around 8%. Negotiations are also underway for JSW to acquire Everstone’s stake, which would further strengthen its control.If JSW succeeds in purchasing SAIC’s stake as well as smaller holdings, it would secure majority ownership in MG Motor India , giving it the autonomy to drive future strategies and product launches more aggressively.SAIC’s Journey in IndiaSAIC entered the Indian market in 2019 through its MG Motor brand after investing around $650 million . One of its early strategic moves was acquiring General Motors’ Halol plant in Gujarat , which became the manufacturing hub for MG’s India operations.Despite a promising start, SAIC’s expansion plans were derailed after India imposed curbs on Chinese investments in 2020. This policy shift followed the border clashes between the two countries and has since made it difficult for Chinese companies to invest or expand operations in India.Earlier Stake Sale to JSWIn 2024, SAIC had already begun scaling down its presence in India by selling a 35% stake in MG Motor India to JSW . The deal was valued at $300 million , raising the automaker’s valuation to around $1.2 billion . The proceeds, however, were remitted to SAIC instead of being reinvested in the Indian venture.Currently, JSW MG Motor has lined up $240 million in planned investments , largely aimed at strengthening its electric vehicle (EV) lineup . However, the funds are pending government approvals under the foreign direct investment (FDI) policy framework.MG Motor’s Performance in IndiaDespite ownership and regulatory challenges, MG Motor India has carved a strong niche in the country’s automotive sector, particularly in the EV space. The brand has become India’s second-largest electric car manufacturer in terms of sales volume, trailing only Tata Motors.The MG Windsor EV has been a major contributor to this success, appealing to a wide segment of Indian EV buyers. In addition, MG has also launched premium models like the Cyberster and MG M9, targeting aspirational consumers looking for advanced features and global designs.What Lies AheadIf JSW succeeds in acquiring SAIC’s stake, it will gain greater independence in steering MG Motor India’s growth strategy . However, its parallel talks with Chery Automobile indicate that the conglomerate is aiming for a diversified presence in the Indian auto sector , balancing MG’s brand equity with a new partnership-driven car company.For SAIC, exiting or reducing exposure in India appears to be a strategic necessity rather than a choice, given both regulatory headwinds and growing competition . For JSW, however, the developments mark an opportunity to strengthen its foothold in the fast-growing Indian EV market , which is projected to be a global hotspot in the coming years.