China’s Great Wall Motors (GWM) has signed an agreement with General Motors (GM) to acquire latter’s Talegaon manufacturing facility, the companies said in a joint statement on Friday. The companies did not disclose the value of the transaction. As per unconfirmed reports, GWM has paid $300 million (Rs2100 crore) to GM for the plant and machinery.
GM will provide a separation package and transition support for impacted employees, as well as an orderly transition for partners. The transaction is expected to close in the second half of 2020.
The move marks the entry of GWM, one of the largest manufacturers of SUVs and pick-ups into the Indian market and a complete exit of GM from India, two years after it stopped selling cars in India’s domestic passenger vehicle market.
Liu Xiangshang, Vice President Global Strategy, GWM, said the transaction would underpin the company’s plan 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,” said Liu adding that it’s line with Indian government’s national strategy of advocating Make In India, Digital India, and a ‘strong focus on clean energy in India’ and building a new India vision.”
GWM said its investment in India will create direct and indirect employment opportunities, further enhancing the skill level in the auto industry. I would promote the development of the local supply chain, R&D and related industries; and contribute more profits and taxes to the exchequer of the governments at the central and state levels.
Baoding, Hebei-headquartered company will officially debut its Haval brand and GWM EV (electric vehicle) at the Delhi Motor Show and launch its Indian market plan, the company said.
“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,” said Julian Blissett, vice president, international operations, GM. Company’s decision to cease production at Talegaon is based on GM’s global strategy and optimization of its manufacturing footprint around the world, he added.
The Detroit-based automaker, one of the earlier entrants into the market that sold the Opel and Chevrolet badged cars, announced its exit from India, after years of struggle in 2017. While it sold its Halol, Gujarat plant to SAIC, it retained the factory in Talegaon and continues to export cars to Latin America and a few other markets.
In the nine months to April, GM exported 54,863 cars, a year-on-year decline of 3.83 per cent from the Talegaon plant. According to people aware of the plans, GM will continue to export from India till the end of this calendar year through a contract manufacturing agreement with GWM. Thereafter, it will cease operations in entirety. Chevrolet will continue to honor all warranties and provide after sales support, including ongoing service and parts requirements for existing customers in India, he said.