Boom in Gloom: MG Motor to invest Rs 2,000 crore, ramping up capacity & continuing hiring
Rajeev Chaba, president & MD, MG Motor
Rajeev Chaba, president & MD, MG Motor

New Delhi: Bringing brightness in gloom, MG Motor India is planning to invest Rs 2,000 crore in expansion and product development in the next two years. At a time when job losses and production cut is order of the day, this China’s SAIC-backed carmaker is doubling its production capacity this month and plans to hire at least 400 people soon. It had already invested about Rs 2,200 crore in India.

The investment will be for expansion of capacity by setting up third line of new body-shop, paint shop. The carmaker may also make another investment in vendor tooling. MG Motor has hired more than 200 people in the last one month and planning to hire another 400 people in the plant by the end of this year.

“In terms of investment, we need to invest in more vendor tooling, some paint shop investments need to be done, in pre treatment area. We are committed to bringing another Rs 2,000 crores in the next two years or so,” Chaba said.

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Doubling Capacity

The carmaker has plans to ramp up its production unit in Gujarat to meet the increased demand for its recently launched SUV Hector. The company claims to have over 28000 advance booking and delivered 2018 units to the customers in August.

“We were expecting 1500 a month, but within two months we need to double it now. So in this month september hopefully we can do 3000 a month which is by the way in this segment equal to all the other players combined,” Rajeev Chaba, President & Managing Director, told ETAuto in an interview. The carmaker has huge pre-booking and weighting period and the ramp will help them ease the situation.

In order to manage the aberration the company is trying to enhance supply chain efficiency,

According to the company, there are some critical suppliers who are going two shifts and some suppliers are doing three shifts.

“They (suppliers) are working on Saturdays and Sundays to give us the supplies we need to extra support them. We are going for extra vendor tooling in some cases and then we have to hire more people,train them to make in the plan,” Chaba added.

Talking about the challenge of sustaining the demand he hopes to maintain anywhere from 2,000 to 3,000 per month and that’s why they are not in a hurry to increase the volume beyond 3000 now.

Talking about other hurdle that has cropped in with disproportionate demand, Chaba admits that some consumers are not being handled properly at the dealership because there is too much of a rush. They were not expecting this kind of crowd in the showroom so some people are not happy with the customer handling.

“We are not absolutely clean and perfect but we are trying to improve and make sure that we are able to meet expectations. It’s a long journey and we’re not at all complacent or confident that everything is sustainable. I think we have to take one step at a time and the first 10-15 thousand customers have to be completely satisfied,” he added.

The company plans to launch a seven seater on recently launched SUV Hector platform during the auto expo
The company plans to launch a seven seater on recently launched SUV Hector platform during the auto expo

7-seater on Hector and Hyundai Kona competitor coming soon

The company plans to launch a seven seater on recently launched SUV Hector platform during the auto expo and before that it will roll out a Hyundai Kona competitor ZS EV in the next two-three months.

“So seven seater is a variant of Hector in which we are trying to bring and before that we’re going to launch EV, so EV we should be launching end of this year and I can promise good mileage, hopefully should give lots of confidence to consumers,” Chaba said.

This vehicle is going to be priced Rs 20 lakh plus for sure. It’s a mid size SUV. “We are getting ready right now and that’s another challenge while we are ramping up Hector, we are also producing EV on the line. Nut we are really happy with this challenge. So far so good,” he pointed.

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