China's Great Wall agrees to buy General Motors' India plant: sources

[艹艹艹]

JANUARY 17, 2020 / 3:48 PM / UPDATED 11 MINUTES AGO
China's Great Wall agrees to buy General Motors' India plant: sources

NEW DELHI (Reuters) - Chinese automaker Great Wall Motor (601633.SS) has agreed to buy General Motors’ (GM) (GM.N) car plant in the western Indian state of Maharashtra, two sources aware of the matter said, setting in motion its plan to build cars in the country.

Great Wall, one of the biggest sellers of sports-utility vehicles (SUV) in China, is expected to pay about $250 million to $300 million to acquire the plant, one of the sources said.

The deal, which the sources said could be announced as early as Friday, will give a jumpstart to Great Wall’s plans to build and sell cars in India and is likely to pave the way for GM’s exit from manufacturing cars in the country.

GM in India did not immediately respond to a request for comment. Great Wall was not immediately reachable for comment.

Chinese automakers are accelerating plans to build cars in India to combat slowing sales at home and have been encouraged by the initial success of rival SAIC Motor (600104.SS) in the country, sources have told Reuters.

While car sales in India are stuttering, the market is expected to become the world’s third biggest by 2026, behind China and the United States, according to consultancy LMC Automotive.

Great Wall’s move also comes at a time when global carmakers like Fiat Chrysler (FCHA.MI), Ford Motor (F.N) and GM are scaling back in India after battling it out in one of the world’s most competitive markets dominated by smaller, low-cost cars made by Maruti Suzuki (MRTI.NS) and Hyundai Motor (005380.KS).

GM, which stopped selling cars in the domestic market from the end of 2017, has already sold one of its two plants to SAIC where the Chinese automaker builds cars under its British brand, MG Motor.

The American automaker continued to build small cars for export to countries like Mexico at its second plant in Talegaon in Maharashtra state which it has now agreed to sell.

Great Wall is expected to boost investment as it upgrades and modifies GM’s plant to suit its needs and set up a base for its suppliers, said one of the sources, adding that the automaker expects to begin production within a year.

The SUV-maker is still finalizing which model it plans to make in India first, including whether to kick off its launch with an electric SUV, Reuters has reported.

The plant is expected to have an annual production capacity of about 150,000-160,000 vehicles, the source said.

 

[Goenitz]

I wonder if war broke out...and both countries decline financially, then how many assets will be sold to foreigners.. it is just a downfall in economy that made this happened..

 

[Smarana Mitra]

I wonder if war broke out...and both countries decline financially, then how many assets will be sold to foreigners.. it is just a downfall in economy that made this happened..

India and China don't intend to fight each other except in words. India actually trusts China more than USA and hence the buying of GM by China may be helpful for India

 

[Goenitz]

India and China don't intend to fight each other except in words. India actually trusts China more than USA and hence the buying of GM by China may be helpful for India

I thought reader would considered pak-india war. As I am Pakistani, talking about India.

 

[艹艹艹]

EXCLUSIVE Great Wall Motor to shift some India investment to Brazil after approval delays -sources
August 11, 2021

• In 2020, Great Wall unveiled plans to invest $1 bln in India
• Part of the $1 bln being re-allocated to Brazil -sources
• Firm close to buying plant in Brazil amid global push -sources
• Great Wall committed to India but cautious over delays -sources

NEW DELHI/BEIJING, Aug 11 (Reuters) - Great Wall Motor (601633.SS) has decided to re-allocate to Brazil a portion of its $1-billion investment in India, as the Chinese automaker has been unnerved by a year-long delay in winning government approvals, three sources told Reuters.

The re-allocation, which could range up to $300 million, comes as the sources said the maker of popular sport-utility vehicles (SUVs) and pick-ups was close to acquiring a former Daimler (DAIGn.DE) plant in Brazil to build cars.

Great Wall has also tasked James Yang, its India president since last year, with the responsibility of assisting with operations in the Latin American nation, said the sources, who have direct knowledge of the matter.

"Brazil is almost a done deal and it did not make sense to keep the funds blocked for India," said one of the sources, explaining the rationale for the change of focus.

Great Wall's move is a fallout of India's decision in April 2020 to more closely scrutinise investments from China, the sources said, as part of a crackdown that followed a border clash between the two Asian giants.

Just two months before, amid the fanfare of India's biennial car show, Great Wall had said it would invest $1 billion to build cars there, by buying a former General Motors (GM) (GM.N) factory, as well as making batteries and car parts.

Two of the sources said the re-allocated funds, budgeted by Great Wall for India since 2020, would mainly have been used to buy GM's factory, a cost that sources had earlier put at about $300 million.

Great Wall declined to comment. The Indian government did not immediately reply to an email seeking comment.

The step highlights growing nervousness and impatience among Chinese investors, who have seen roughly 150 investment proposals worth more than $2 billion held up by India's slow approvals process, according to industry estimates.

The delays are forcing Great Wall, which was expected to begin selling its India-made Haval brand of SUVs in the country this year, to look at taking a more measured approach.

It may even consider entering the market with a fully-built imported vehicle before starting domestic production, one of the sources said.

"When approvals in India come through, Great Wall will be ready with the money, but it may not be a straight decision anymore," said the source.

"The company will judge the situation before moving forward. What if future approvals get stuck?"

Earlier this year, India had been set to clear about 45 of the investment proposals from China, mainly in manufacturing, but it was not immediately clear how many had been approved.

Indian officials say the situation cannot return to business as usual until de-escalation at the border is complete, however.

The Chinese automaker will also wait for ties between the two nations to improve and for the COVID-19 pandemic to ease in India before speeding up its plans for the market, said a second source.

Great Wall still wants to make cars in India and is now building its supply chain, the source added.

The firm saw India as a key market when it kicked off its global expansion, envisioning its plant in the subcontinent to be its biggest outside China.

Great Wall now makes cars in Russia and Thailand, where it acquired a plant at the time it announced its India plans.

Brazil is the latest market in its global push, where it plans to build its Haval brand of SUVs for domestic sale and export, the sources said.

Great Wall, which sold 1.1 million cars last year, mostly in China, is eyeing an aggressive plan to expand in Asian, European and Latin American markets.

It is developing electric Mini cars with BMW (BMWG.DE) and is building a factory with the German premium carmaker in China.

 

[Place Of Space]

Great Wall motor is a joke according to this case. It buy foreign motor company, but it still can't get the highest petrol vehicle technology. Chinese motor company cooperated with foreign counterparts for 3 decades, they still can get very poor margins, money are collected by technology owners.
Electric vehicle is the future. This is the main way Chinese vehicle companies surpass the petrol vehicles giants by gaining core electric technology. All motor companies in the world are at the same starting line now, everyone has chance. Chinese company have market strength.