General Motors (GM) announced on Friday that it had cancelled the sale of a defunct Indian facility to China's Great Wall Motor due to a lack of regulatory permissions, amid a stricter attitude by New Delhi toward Chinese investments.
In January 2020, GM agreed to sell the facility to Great Wall, with the Chinese SUV maker likely to pay up to $300 million as part of a $1 billion investment plan to establish a presence in India's expanding vehicle market.
The deal, which had been extended twice, came to an end on June 30.
"We have been unable to obtain the required approvals within the time frame of the deal," George Svigos, executive director of communications at GM International, told Reuters.
"Our strategy in India remains unchanged and we will now explore further options for the sale of the site," he said, adding 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 on Friday, while confirming the termination of the plant deal.
There were no comments on the issue form the Indian government.
GM's agreement with Great Wall came just months before India toughened its stance on investment from neighbouring countries, including China, in April 2020, making them the first major casualty of the move, which has stymied billions of dollars in capital inflows in sectors such as automobiles and technology.
This was part of a broader drive by India on enterprises having Chinese ties as diplomatic relations deteriorated. Separately, amid security concerns, New Delhi has banned over 300 Chinese mobile apps, including TikTok.
"It is hoped that the relevant countries will properly honor their commitment to openness and cooperation and provide a fair, just and non-discriminatory business environment for foreign investors,” China's Ministry of Foreign Affairs told Reuters when asked to comment on the matter.
The action effectively ends a more than two-year campaign by GM and Great Wall, requiring the American company to renew its search for a buyer while continuing to invest in plant gear and tooling.
When asked if the plant could be used to manufacture electric vehicles, Svigos said it could be utilised for a variety of industrial purposes, including by non-automotive industries, and that GM would look at all options.
GM, which ceased car sales in India at the end of 2017, has already sold its second facility to SAIC Motor Corp, where the Chinese carmaker manufactures vehicles 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.
Following difficulties in obtaining government permits, Great Wall re-allocated a portion of its $1 billion investment slated for India to Brazil and transferred some of its employees last year.
(Source:www.cnbctv18.com)
In January 2020, GM agreed to sell the facility to Great Wall, with the Chinese SUV maker likely to pay up to $300 million as part of a $1 billion investment plan to establish a presence in India's expanding vehicle market.
The deal, which had been extended twice, came to an end on June 30.
"We have been unable to obtain the required approvals within the time frame of the deal," George Svigos, executive director of communications at GM International, told Reuters.
"Our strategy in India remains unchanged and we will now explore further options for the sale of the site," he said, adding 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 on Friday, while confirming the termination of the plant deal.
There were no comments on the issue form the Indian government.
GM's agreement with Great Wall came just months before India toughened its stance on investment from neighbouring countries, including China, in April 2020, making them the first major casualty of the move, which has stymied billions of dollars in capital inflows in sectors such as automobiles and technology.
This was part of a broader drive by India on enterprises having Chinese ties as diplomatic relations deteriorated. Separately, amid security concerns, New Delhi has banned over 300 Chinese mobile apps, including TikTok.
"It is hoped that the relevant countries will properly honor their commitment to openness and cooperation and provide a fair, just and non-discriminatory business environment for foreign investors,” China's Ministry of Foreign Affairs told Reuters when asked to comment on the matter.
The action effectively ends a more than two-year campaign by GM and Great Wall, requiring the American company to renew its search for a buyer while continuing to invest in plant gear and tooling.
When asked if the plant could be used to manufacture electric vehicles, Svigos said it could be utilised for a variety of industrial purposes, including by non-automotive industries, and that GM would look at all options.
GM, which ceased car sales in India at the end of 2017, has already sold its second facility to SAIC Motor Corp, where the Chinese carmaker manufactures vehicles 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.
Following difficulties in obtaining government permits, Great Wall re-allocated a portion of its $1 billion investment slated for India to Brazil and transferred some of its employees last year.
(Source:www.cnbctv18.com)
Homepage
Send to a friend
Printable version
Share
