Jindal expands canvas with electric vehicles and paint ambitions
JSW Group chairman Sajjan Jindal wants to recreate a Maruti moment in EVs and scale up the Group’s fledgling paints business; but the entry of a commodity company like JSW into the consumerfocused automotive and paints segments already dominated by large players has puzzled many
In 1984, when Maruti first launched its vehicle there was so much excitement. Today, they have a 50% market share SAJJAN JINDAL, Chairman, JSW Group
For JSW Group’s Chairman, Sajjan Jindal, making cars has been a childhood passion. “I built my first car in a garage when I was 12 years old. It was a small car and I used to go around it in our factory in Hisar, Haryana,” says the 63 yearold industrialist. However, Jindal’s passion took a back seat as he decided to join the family business of making steel.
But 52 years later, after building the world’s seventhlargest steel company, excluding China, Mr. Jindal is now making his automotive dream a reality. Last week, the JSW group outlined its strategy to corner a 33% market share in the electric vehicle segment through a joint venture with China’s SAIC Motor, the owner of MG Motors.
“This idea of making cars in India by the JSW Group always remained in my head and during 201516 when the new technology for electric vehicles came in, I thought that this is an opportunity to enter this business,” he said.
To start with, JSW Group, along with other investors,, MG Motor India dealers and employees will invest ₹5,000 crore for a 51% stake in JSW MG Motor India while the remaining 49% will be held by Chinese stateowned SAIC Motor. The joint venture plans to roll out a new model every three to six months. “We are all set to recreate a Maruti moment. I recall in 1984 when Maruti first launched its vehicle there was so much excitement and everybody wanted to own one. Today, they have 50% market share,” he said.
A large canvas
Auto is not the only market where Jindal is looking to disrupt. Mr. Jindal is eyeing multiple new areas of growth including a significant play in the ₹70,000 crore paints industry, and EV battery manufacturing to capitalise on the booming electric vehicle segment.
In the paints segment, JSW is eyeing a capex of ₹7501,000 crore over the next 23 years as it looks to up production capacities by 2 lakh kilo litres (kl) per annum and a plan to corner a market share of 810% over the next three years. JSW Paints, the Group’s latest venture, is on course to cross revenue of ₹2,000 crore and will break even at the EBITDA level by the end of this fiscal.
Launched in 2019, the company has recorded a revenue of ₹1,616 crore in FY23. It has achieved a market scale and coverage of over 60% in paintselling towns and increased its retailer network by adding more than 2,000 retailers every year.
However, it is the entry of a commodity company like JSW Group into the consumerfocused automotive and paints segment that has puzzled many. Both these markets already have large players dominating the consumer mind space. In the auto space, for example, Tata Motors and Mahindra & Mahindra have taken considerable lead in the EV segment. Similarly, in the paints business, there are players like Asian Paints and Berger Paints that dominate the market.
Banking on headroom
But this does not worry JSW group. “As they always say, good things take time to start,” Mr. Jindal said. His confidence comes from the fact that these markets have a huge headroom for growth. According to experts, the paint segment grows at 1.5 times the GDP growth. This provides enough scope for new market entrants to establish their presence without necessarily impacting the current pecking order.
In the electric vehicle space, the adoption in India has been slow due to high cost, lack of proper charging infrastructure and after sales services. Starting on a clean slate, JSW Group has the advantage of adopting the latest technology.
Mr. Jindal ties his passion to build cars to the national cause of reducing the import bill. “I believe electric vehicle is the only answer to cut our import bill on oil. We produce our own energy as we have enough sunlight and wind to produce renewable energy to charge the batteries in the cars,” he says. JSW is not only looking
to manufacture vehicles but also ensure presence across the entire ecosystem of EVs including batteries and components to bring down cost and widen its adoption.
But how will JSW deal with issues like the lack of charging infrastructure? Mr. Jindal cites the example of how public calling offices (PCOs) made telephones accessible to the masses before mobile phones came in. “Every shopkeeper used to hang a telephone outside his shop for people to make calls. Similar solutions will emerge for charging electric cars,” Mr. Jindal said adding that his group company JSW Energy will also be partnering with a few startups to put up charging stations at major locations.
“We believe in scale and are going to churn the whole industry and create some sort of a disruption in the industry,” he said.
When Maruti drove into India 40 years ago it changed the auto industry and brought in very efficient lightweight cars. The Ambassadors and the Fiats went into oblivion, he said. “I believe with MG we can recreate the same moment in the new energy vehicle space. That is why JSW, a commodity player with presence in steel, cement and energy, has come into this B2C consumer product,” he explains.
(The writer is with The Hindu businessline)