GM cancels plans to sell Indian car plant to Great Wall of China

The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. REUTERS/Rebecca Cook/File Photo

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NEW DELHI/SHANGHAI, July 1 (Reuters) – General Motors (GM) (GM.N) said on Friday it had canceled the sale of a shuttered Indian plant to Great Wall Motor in China after failing to obtain regulatory approvals, in amid a hardening New Delhi stance on Beijing’s investment.

GM reached a deal in January 2020 to sell the plant to Great Wall (601633.SS), with the Chinese SUV maker set to pay up to $300 million as part of a broader $1 investment plan. billion to establish a presence in the growing Indian market. automotive market.

The agreement, which was extended twice, expired on June 30.

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“We were unable to obtain the required approvals within the time frame of the agreement,” George Svigos, executive director of communications at GM International, told Reuters.

“Our strategy in India remains unchanged and we will now explore other options for the sale of the site,” he said, adding that the company “hopes to achieve a price that reflects the value of the asset.”

“Great Wall Motor will keep its focus on the Indian market in the future and continue to seek new opportunities,” the Chinese automaker said in a statement on Friday, while confirming the termination of the agreement with the factory.

The Indian government did not immediately respond to emails seeking comment.

GM’s deal with Great Wall was struck just months before India toughened its stance in April 2020 on investments from neighboring countries, including China, making it the first major casualty of the move that has blocked billions of dollars of capital inflows into sectors such as automotive and technology.

It was part of a broader crackdown by India on companies with ties to China amid deteriorating diplomatic relations. Separately, New Delhi has also banned more than 300 Chinese mobile apps, including TikTok, for security reasons.

The move caps a more than two-year effort by GM and Great Wall, forcing the U.S. company to relaunch its search for a buyer while continuing to spend money to maintain certain machinery and tooling at the plant. .

Asked if the plant could be used to manufacture electric vehicles, Svigos said it was suitable for a number of industrial uses, including by non-automotive companies, and that GM would explore all options. .

GM, which stopped selling cars in India at the end of 2017, has already sold its other plant to SAIC Motor Corp (600104.SS), where the Chinese automaker builds cars under its British brand MG Motor.

It will also put Great Wall back to the drawing board over its plans to enter India, which it saw as an important part of its global strategy to enter new markets like Latin America, Thailand and Brazil.

Last year, Great Wall reallocated part of its $1 billion India investment to Brazil and reallocated some of its staff after delays in obtaining government approvals. Read more

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Reporting by Aditi Shah, Zhang Yan Editing by Mark Potter and Kmi Coghill

Our standards: The Thomson Reuters Trust Principles.

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