General Motors retracts plan to sell shuttered Indian plant to Great Wall Motor
General Motors (GM) has retracted its plan to sell off a shuttered manufacturing facility in India to China's Great Wall Motor (GWM) after they failed to secure the regulatory approvals as India adopts a tougher stance towards investments from China. In January of 2020, GM had sealed a deal with GWM for the plant, and the latter was expected to pay up to $300 million as part of a broader plan to invest $1 billion to establish a presence in India.
The agreement, which was already extended twice before, finally expired on June 30. Commenting on this, GM International's executive director - communications, George Svigos, told Reuters, “We have been unable to obtain the required approvals within the time frame of the deal." However, GM is still keen on selling the shuttered plant here and its strategy remains unchanged. "We will now explore further options for the sale of the site," Svigos said. He added that the company "hopes to achieve a price that reflects the value of the asset".
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GM's deal with Great Wall was signed just months before India toughened its stance against investment from China and other neighbouring countries in April 2020, making the GM-GWM deal the first major casualty of the move. It held up billions of dollars of capital inflow in automobile sector.
Following this move, the US auto firm has been forced to start hunting again for a buyer while it continues to spend money on maintaining some machinery and tooling in the otherwise shuttered factory. GM has also clarified that the plant is suitable for a number of industrial uses, including by non-automotive companies.
GM had discontinued selling cars in India in the end of 2017, and has already sold its other plant to SAIC Motor Corp, where the Chinese company builds cars under its British brand, MG Motor.
(with inputs from Reuters)
