GM ends plan to sell India plant to Great Wall

Zapping The Blogauto Dacia Jogger test drive

Agreement concluded in January 2020

In January 2020, GM reached an agreement to sell the plant to Great Wall. The Chinese automaker then pledging to pay nearly $300 million as part of a broader $1 billion investment plan to establish its presence in the growing Indian auto market. The agreement, which was extended twice, expired on June 30.

Other options for the sale of the site will be studied

“We were unable to obtain the required approvals within the time frame of the agreement,” said George Svigos, executive director of communications at GM International.

Adding that the manufacturer’s strategy in India remained unchanged, he said that GM would now explore other options for the sale of the site. The automotive group “hopes to reach a price that reflects the value of the asset”.

This decision therefore puts an end to an effort of more than two years by GM and Great Wallforcing the American manufacturer to relaunch its search for a buyer while continuing to pay maintenance costs for certain machines and tools at the plant.

When asked if the plant could be used to produce electric vehicles, George Svigos said it was suitable for a number of industrial uses, including by non-automotive companies, and that GM would explore all options.

India toughens stance on neighbors’ investments

GM’s deal with Great Wall was struck just months before India toughened its stance in April 2020 on investment from neighboring countries, including China. The Middle Kingdom is de facto the region most affected by this decision which has blocked billions of dollars of capital inflows in sectors such as automotive and technology.

India has concurrently waged a broader crackdown on companies with ties to China, amid deteriorating diplomatic relations. New Delhi has also banned more than 300 Chinese mobile apps, including TikTok, over security concerns.

Great Wall must review its plan to expand in India

Great Wall must now review its plans to enter India, a country it considered an important part of its global strategy to enter new markets such as Latin America, Thailand and Brazil.

Last year, Great Wall reallocated part of its $1 billion India investment to Brazil and reallocated some of its staff after delays in obtaining government approvals.

Source: Reuters