General Motors (GM) yesterday said it had called off the sale of a shuttered Indian plant to China’s Great Wall Motor Ltd (長城汽車) after they failed to obtain regulatory approvals, amid a tougher stance by New Delhi toward investments from Beijing.
GM struck a deal in January 2020 to sell the plant to Great Wall, with the Chinese SUV maker expected to pay up to US$300 million as part of a broader plan to invest US$1 billion to establish a presence in India’s growing auto market.
The agreement, which was extended twice, expired on Thursday.
“We have been unable to obtain the required approvals within the time frame of the deal,” said George Svigos, executive director of communications at GM International.
“Our strategy in India remains unchanged and we will now explore further 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 attention to the Indian market in the future and continue looking for new opportunities,” the Chinese automaker said in a statement yesterday, while confirming the termination of the plant deal.
The Indian government did not immediately respond to e-mails seeking comment.
GM’s deal with Great Wall was agreed just months before India toughened its stance in April 2020 on investment from neighboring countries, including China, making it the first major casualty of the move that has held up billions of dollars of capital inflow in sectors such as automobiles and technology.
This was part of a broader crackdown by India on businesses with Chinese links amid worsening diplomatic relations. New Delhi has also banned more than 300 Chinese mobile apps, including TikTok, over security concerns.
GM has to restart its hunt for a buyer, while it continues to spend money on maintaining some machinery and tooling in the factory.
Asked if the plant could be used to make electric vehicles, Svigos said it was suitable for a number of industrial uses, including by non-automotive companies, and 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 (上海汽車), where the Chinese automaker builds cars under its British brand, MG Motor.
This will also send Great Wall back to the drawing board on its plans to enter India, which it considered an important part of its global strategy to break into new markets like Latin America, Thailand and Brazil.
Last year, Great Wall reallocated to Brazil a portion of its US$1 billion investment earmarked for India and reassigned some of its staff after delays in winning government approvals.
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