MG Motor India To Invest INR 2,500 Crore To Ramp Up Its Production Capacity

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The Indian car market is currently booming with new entrants and updated models. The next couple of months are going to be extremely packed as the festive season will lure in manufacturers to capitalize on it. MG Motor India has written quite a success story and the company is soon going to include another SUV in its portfolio – the Astor. The Astor has been officially teased when MG revealed its key features and USPs a few days back. And now, the company has announced that it is looking forward to investing Rs 2,500 crore by the end of next year to increase the production capacity at its Halol plant in Gujarat.

Gearing up for Astor’s launch

This announcement comes ahead of Astor’s official debut because the company does have high hopes from its upcoming 5-seater SUV that is going to challenge the Koreans for the throne.

MG Astor (1)

“We have done an investment of Rs 3,000 crore already, and by the end of next year, we will do another Rs 2,500 crore. We will reach a total of Rs 5,500 crore,” MG Motor India President and Managing Director Rajeev Chaba told PTI. He continued “Hopefully by quarter one next year, depending on materials supplies, we will start producing 7,000 units a month. Right now, with the kind of work crew and workforce we have, we can do 4,000-4,500 cars a month but unfortunately, because of material shortages, 3,500 to 4,000 units a month is the real availability of the current portfolio. When we add Aster to it (the product portfolio), we will (have to) increase the capacity.”

Semiconductor issue

On the semiconductor shortage issue, Chaba said, “It has deteriorated, it has gone worse. We were expecting it will improve… In my opinion, unfortunately, it will continue for at least another six months.” Elaborating further he said due to the coronavirus pandemic there has been a spike in demand for semiconductors from almost every industry, including gaming, smart gadgets, laptops and mobile phones.

Also read: MG Astor To Become The First SUV In Its Segment With Level 2 Autonomous Tech And AI Assistant

semiconductor 1

While the automotive industry accounts for only 10 per cent of semiconductor demand, 90 per cent goes into non-auto industry, he added. As fabrication units for chips have a long gestation period, he said additional capacities will get added only next year, “because people who have taken the decision, let’s say seven, eight months back, those factories will be up and running only next year”.

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