Hyundai Motor, Tata Motors and Mahindra & Mahindra in race to acquire GM India Talegaon plant

The South Korean car maker appears to be leading the race with multiple meetings with GM India in the last fortnight.

By Ketan Thakkar calendar 25 Nov 2022 Views icon36904 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp

With the Indian passenger vehicle market on the path to scale a new peak, three out of the country’s top four car makers – Hyundai Motor India, Tata Motors and Mahindra & Mahindra are engaged in a race to acquire General Motors’ Talegaon plant on the outskirts of Pune.

For all three carmakers it is a race to a one million production capacity even as market leader Maruti Suzuki continues to add new factories every two years.

Sources say, there has been fervent activity at the Talegaon plant in the last fortnight with frequent visits by senior delegates of Hyundai Motor India and Tata Motors at the factory for negotiation.

Over the last couple of months – executives from Mahindra & Mahindra also visited the plant to conduct a study for a potential acquisition of the plant to bring in incremental capacity.

Autocar Professional learns, Hyundai Motor India at present seems to be leading the race and already Korean delegates have engaged in a negotiation with GM executives several times in the last fortnight.

According to several people in the know, given the strong revival in the market in the market post Covid-19, the top officials of Hyundai have been scouting for a new factory over the last few years. They had already explored three to four different alternatives including Ford’s factory in Chennai and Sanand.

“The incremental capacity of 2.5 lakh for India has been approved by the headquarters and the company has been exploring various options to increase capacity. The investment in the new plant will help the company to not only cater to increased demand in the marketplace, but also prepare itself for the EV project of E-GMP,” said a person close to the development requesting anonymity.

All three car makers, Hyundai Motor, Tata Motors and Mahindra & Mahindra are currently operating at over 90-95 percent capacity utilisation at their respective factories and between them, they are sitting on pending bookings of close to half a million units.

While Tata Motors is likely to get additional capacity from Sanand, Gujarat post its acquisition of the Ford factory earlier in the year, given its mid-term ambition of growing faster than the market and the new product portfolio planned, it may need another factory to achieve its long-term ambitions.

An email sent to Hyundai Motor India and Mahindra & Mahindra did not elicit any response.

In its official response, Tata Motors spokesperson said, “No comments on speculation.”

A General Motors India spokesperson said, “We don’t comment on speculations.”

Mahindra & Mahindra on its part had recently announced an expansion of its existing plant capacity by 60 percent to cater to the rising orderbook and the management had even expressed its intent of setting up a dedicated EV facility.

The interest in the GM India plant is higher due to an attractive acquisition price which may not exceed $50-75 million, but whoever acquires the factory may have to manage the workers. The workers union at Talegaon factory have been engaged in an intense legal battle with the US car maker in multiple courts.

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