NEW DELHI/SHANGHAI – General Motors stated on Friday it had known as off the sale of a shuttered Indian plant to China’s Great Wall Motor after it didn’t receive regulatory approvals, amid a harder stance by New Delhi in direction of investments from Beijing.
GM struck a deal in January, 2020 to promote the plant to Great Wall, with the Chinese SUV-maker anticipated to pay as much as $300 million as a part of a broader plan to speculate $1 billion to determine a presence in India’s rising automobile market.
The settlement, prolonged twice, expired June 30.
“We have been unable to obtain the required approvals within the time frame of the deal,” George Svigos, govt director of communications at GM International, advised Reuters.
“Our strategy in India remains unchanged and we will now explore further options for the sale of the site,” he stated, including the corporate “hopes to achieve a price that reflects the value of the asset”.
“Great Wall Motor will keep its attention to the Indian market in the future and continue looking for new opportunities,” the Chinese automaker stated in a press release on Friday, whereas confirming the termination of the plant deal.
The Indian authorities didn’t instantly reply to emails searching for remark.
GM’s cope with Great Wall was finalized simply months earlier than India toughened its stance in April, 2020 on funding from neighboring international locations together with China, making them the primary main casualty of the transfer that has held up billions of {dollars} of capital influx in sectors reminiscent of vehicles and know-how.
This was a part of a broader Indian crackdown on companies with Chinese hyperlinks amid worsening diplomatic relations. Separately, New Delhi additionally banned greater than 300 Chinese cell apps, together with TikTok, over safety considerations.
“It is hoped that the relevant countries will properly honor their commitment to openness and cooperation and provide a fair, just and non-discriminatory business environment for foreign investors,” China’s Ministry of Foreign Affairs advised Reuters when requested to touch upon the matter.
The transfer forces GM to restart its hunt for a purchaser whereas it continues to spend cash on sustaining some equipment and tooling within the manufacturing unit.
Asked if the plant may very well be used to make EVs, Svigos stated it was appropriate for various industrial makes use of, together with by non-automotive firms, and GM would discover all choices.
GM, which stopped promoting vehicles in India on the finish of 2017, has already offered its different plant to SAIC Motor Corp, the place the Chinese automaker builds vehicles underneath its British model, MG Motor.
This additionally sends Great Wall again to the drafting board on its plans to enter India, which it thought of an necessary a part of its international technique to interrupt into new markets like Latin America, Thailand and Brazil.
Last 12 months, Great Wall re-allocated to Brazil a portion of its $1 billion funding earmarked for India and reassigned a few of its workers after delays in successful authorities approvals.
Source: www.autonews.com
