China's Great Wall Motors (GWM), which has recently announced its entry into the Indian passenger vehicle market with its Haval brand, and General Motors (GM) today announced an agreement for the sale of GM India’s Talegaon manufacturing facility, subject to requisite government and regulatory approvals.
With this latest move, GM will completely cease its manufacturing operations in India, having stopped sales in the domestic market in December 2017.
Under a binding term sheet signed yesterday, the GM India legal entity, which includes the Talegaon facility, will transfer to GWM. GWM Global Strategy vice-president Liu Xiangshang 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.
“It is also an important measure to respond positively to the Indian government’s national strategy of vigorously advocating Make In India, Digital India and a ‘strong focus on clean energy in India’ and building a new India vision.”
“Great Wall Motors’ investment will create more jobs, including direct and indirect employment, further enhancing the skill level in the auto industry; promote the development of the local supply chain, R&D and related industries; and contribute more profits and taxes to the government of India and the government of Maharashtra.”
“Great Wall Motors will officially debut its Haval brand and GWM EV at the Delhi International Auto Show, and launch its Indian market plan.”
What really made GM leave India
GM to provide separation package and transition support to Talegaon plant staff
GM International Operations senior vice-president Julian Blissett said the Talegaon manufacturing facility had delivered excellent vehicles for domestic and export markets. He thanked employees and partners for their outstanding work over many years. “Since focusing the Talegaon plant on manufacturing for export markets in 2017, GM has been exploring strategic options for the better utilisation of the site,” said Blissett.
“Our decision to cease production at Talegaon is based on GM’s global strategy and optimisation of our manufacturing footprint around the world.”
“On behalf of GM, I also want to express our gratitude to the government of Maharashtra and the government of India for their supportive partnership ever since we began to make investments and build cars in India. We will work closely with the state and national governments to secure the required approvals so that GWM can elevate production at the plant even further and maintain Talegaon’s status as a vibrant vehicle manufacturing region.”
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.
Chevrolet will continue to honor all warranties and provide aftersales support, including ongoing service and parts requirements for existing customers in India.
GM India’s plant at Talegaon, Maharashtra has a manufacturing capacity of 130,000 units per annum and since the company’s exit from the domestic market in December 2017, produces only the Beat sedan for the export market. In April-December 2019, total exports were 54,863 units, down 3.85% year on year, which also means there is plenty of unutilised capacity. In CY2019, GM's Talegaon plant produced around 75,587 cars, and exported 75,131 units.
Curtains down for GM in India
General Motors' was among the first OEMs to assemble cars during pre-independent India, before ceasing assembly operations in 1954. It was in 1994 when the company re-entered the country in a JV with Hindustan Motors for manufacturing and selling the Opel brand from the Halol facility, and in 1999 GM bought out its partner’s interest.
Betting big on the Indian auto market, the company began construction of its second plant at Talegaon, Maharashtra that was completed in 2006, and was the last remaining facility for GM in India. In April 2017, the company closed down its Halol plant, Gujarat after 21 years of operation, thus marking its exit from the domestic market. This plant was sold to MG Motor India, which has since begun manufacturing the Hector SUV.
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