MG in talks with VW, Mahindra for contract manufacturing

MG rumoured to be looking at contract manufacturing amidst India-China border tensions.

According to a media report, MG is having discussions with Volkswagen and the Mahindra-Ford JV to lease out their assembly lines for contract manufacturing. This comes in the wake of the recent border tensions between India and China, which has lead to an increased government scrutiny on investments by Chinese companies.

The report states that MG has held talks with both automakers separately. The Volkswagen Group is more likely to partner with MG as it already has good relations with SAIC – the China-based parent company of MG. The deal will also help VW utilize the idle production capacity at its factories in India.

At present, MG cars are manufactured at Halol, Gujarat. The assembly plant which was earlier owned by General Motors has a production capacity of 1 lakh units per annum.

MG has not confirmed these reports. There has been no confirmation from VW or Mahindra either.

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