(Yicai Global) June 27 -- SAIC Motors is not losing control over its Indian subsidiary, China’s largest auto manufacturer said yesterday, refuting reports that it might be coerced into taking a minority stake in MG Motor India due to the compulsory sale of equity at a low price to local entities.

“SAIC owns MG Motor India and any equity transactions that involve the Indian unit need to be approved by the Chinese government,” the carmaker, which entered the Indian market in 2017 and runs a factory there, said on its WeChat account yesterday.

“The company’s international operations strictly comply with the policies, laws and regulations in China as well as in the countries where its overseas businesses are located,” SAIC said. “The Shanghai-based firm also fully respects the laws of the market and completely owns the right to handle its own affairs.”

Indian media previously reported that Indian steel-to-energy conglomerate JSW Group is aiming to buy a between 45 percent and 48 percent stake in MG Motor India, and that its dealers and local employees will take another 5 percent to 8 percent, meaning SAIC will lose control over the unit.

The reported sale would reduce MG Motor India’s valuation to between USD1.2 billion to USD1.5 billion from the expected USD8 billion to USD10 billion.

The Chinese auto giant is also trying to preserve its assets by increasing its investment in India, such as through injecting INR50 billion (USD611 million) to construct another plant in the Southeast Asian country as well as to expand the manufacturing of electric vehicles. However, none of these plans have been carried out yet.

India, though, only accounts for a very small part of SAIC’s overseas sales. SAIC, whose vehicles are available in more than 90 nations and regions worldwide, has a strong foothold in the UK, Germany, France, Italy, Spain and Sweden.

SAIC sold 438,000 vehicles overseas in the first five months, a year-on-year jump of 47.7 percent, and sales are expected to reach 1.2 million units this year, it said.

SAIC’s share price [SHA:600104] was trading down 0.4 percent at CNY13.98 (USD1.90) as of 1 p.m. China time today.

Editor: Kim Taylor