General Motors continues to offload its manufacturing operations around the world, with the latest one being in India, probably the car market with the biggest growth potential in the world.
China’s Great Wall Motors today announced it has reached an agreement with General Motors to buy GM India, including the latter entity’s Talegaon plant. The deal, which is subject to necessary government and regulatory approvals, marks GM’s exit from manufacturing cars in the country. In mid-2017, GM sold the Halol factory to SAIC Motor, which currently builds the MG Hector there.
At the end of 2017, GM stopped selling cars in India altogether and made the Talegaon plant an export-oriented facility. Since then, the factory has been building Chevrolet Beat hatchbacks and sedans for export to Latin American markets.
Another Exit: GM Sells Off Russian Assembly Operation That Builds Chevrolet Niva
For China’s biggest SUV maker, the transaction gives it control over a factory that’s key to its plans to enter the Indian car market. The two sides signed a binding term sheet yesterday stipulating that GM India, which includes the Talegaon facility, will transfer to GWM. The financial terms of the deal, which is expected to close in the second half of 2020, haven’t been made public. According to Reuters, GWM is likely to pay $250 million to $300 million for the plant.
GWM’s global strategy vice president Liu Xiangshang said the transaction is a gateway for the company to enter and invest in India. “The Indian market has great potential, rapid economic growth and a good investment environment. Entering the Indian market is an important step for Great Wall Motors’ global strategy,” the executive said.
He added that Great Wall Motors will create more jobs in India, including direct and indirect employment, promote the development of the local supply chain, R&D and related industries, as well as contribute more profits and taxes to the government of India and the government of Maharashtra state.
GWM will make its official debut in India at the Delhi International Auto Show next month (February 7-12) where it will launch the Haval brand and GWM EV, as well as announce its market plan for the country.
As for GM, it said the decision to sell the India business is based on its “global strategy and optimization of our manufacturing footprint around the world.”
“Since focusing the Talegaon plant on manufacturing for export markets in 2017, GM has been exploring strategic options for the better utilization of the site,” explained GM International Operations senior vice president Julian Blissett.
In the common press statement, GM said it would provide “a generous separation package and transition support for impacted employees,” as well as an orderly transition for partners. Furthermore, Chevrolet will continue to honor all warranties and provide after-sales support.
