A week after Shanghai Automotive Industries Corporation (SAIC), the largest automobile manufacturer in China, confirmed plans to enter the Indian market with the MG brand of vehicles, the company signed a memorandum of understanding (MoU) with the state government of Gujarat yesterday.

The MoU was signed by SAIC Motor officials, Vijay Rupani, chief minister of Gujarat and MK Das, principal secretary, industries and mines department.

With manufacturing slated to start in 2019, the MoU states that the company plans to produce 50,000-70,000 vehicles in the first year of operation. SAIC Motor plans to employ around 1,000 workers when the plant goes on stream. The company will take over the recently shutdown Halol plant of GM India for its manufacturing operations.

SAIC had earlier said it plans to operate in the country through a fully-owned subsidiary, MG Motor India, and appointed Rajeev Chaba as its president and MD, and P Balendran as the executive director.

Other than SAIC, which is to invest Rs 2,000 crore in the India project, five Chinese automotive suppliers – Yanfeng Automotive Interiors, Huichoung, Wuling Industry, LingYun Industrial Co and Sevic – are to set up units near the plant with an additional investment of Rs 1,000 crore.

The Gujarat government has said it will facilitate registration, approval and other collaboration for the project.