Great Wall Motors of China is inching close to acquire General Motors’ manufacturing facility in Maharashtra. A formal agreement over the facility at Talegaon in Pune district is likely to be signed by the end of the month, and General Motors is likely to fetch about $250-300 million from the sale, one of the people said. There were reports that GWM has already set up its manufacturing facility in Sanand, Gujarat, and is going to make an investment of around Rs 7,000 crore.
GWM and GM have already agreed upon the terms over certain disputed liabilities of GM in India. Previously, there were reports that India’s JSW Group was in talks with GM over the acquisition of the plant as part of its strategy, but both parties could not reach an agreement.
Wei Jianjun, Global Chairman of Great Wall Motors, was in India last week to review the company’s plans before it announces its official India entry, which is likely to take place in the upcoming Auto Expo 2020. According to Chinese media reports, the chairman also met the Chinese ambassador as part of his India visit.
Great Wall and GM deal can offer the company a quick entry into India by 2021. Despite GM’s exit from the local market, the US carmaker has been using the Maharashtra facility for exports. It shipped 50,000-70,000 cars annually in the past couple of years, equal to 10% of the country’s passenger vehicle exports.
GM India, in a response to ET, said “it does not comment on speculation”. “Our Talegaon plant continues to manufacture vehicles for export. As we have said previously, we continue to explore options to improve utilisation of the plant. We do not propose to discuss options publicly,” said a spokesperson.
Gaurav Vangaal, the country lead for production forecasting at IHS Markit, said a deal for the plant would be a win-win for both Great Wall and GM, and a relief for vendor companies in Pune, as per media reports.
Great Wall had already approved a $1.6 million investment in February 2019 to set up the local Indian office, which was to be named India Haval Auto, India Haval or India Haval Auto Sales, based on regulatory clearance. The company has been using India as a tech hub for coding software for EVs and artificial intelligence. It began hiring for the local automotive business in 2018.
The company has plans to focus on only petrol, hybrid and electric powertrains and has no plans of entering the diesel SUV segment here being China’s largest SUV maker. It has recently announced to showcase its cheapest electric cars in India with its Haval and ORA brands, both to be showcased at the upcoming Auto Expo 2020.
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The Ora R1 has an incentivized price tag that ranges between Rs 6.24 lakh and around Rs 8 lakh. For reference, the Maruti WagonR-based EV is expected to get in India could cost more than Rs 9 lakh.
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