Indian state government has delayed an investment proposal from Chinese automaker Great Wall Motors that would see nearly $500 million poured into refurbishing a former GM India plant. The delay follows violence between India and China in a border skirmish last week that resulted in the deaths of 20 Indian soldiers.
According to a recent report from Reuters, the agreements have not been canceled. Rather, the Indian state government of Maharashta has stated that further action is needed in order for them to proceed.
“In the current environment, we will wait for the federal government to announce a clear policy regarding these projects,” said Maharashtra industries minister Subhash Desai.
GM Talegaon facility in 2014
Back in January, it was announced that Chinese automaker Great Wall Motors was poised to acquire the GM India plant in Talegaon, India, for a reported $250 million to $300 million. The acquisition was intended to help Great Wall Motors expand its business outside of China with new sales in India. The former GM India plant is expected to produce between 150,000 and 160,000 cars annually under Great Wall Motors ownership. The deal was scheduled to be completed by the second half of 2020, and marks an end to GM manufacturing in India.
Great Wall Motors subsequently committed to investing $1 billion in India in a phased process, including nearly $500 million slated for the former GM India plant.
Great Wall Motors, which is China’s largest SUV manufacturer, made its Indian debut in February, with plans to tap into one of the largest auto markets in the world. However, anti-Chinese sentiment has been running high in India following the border violence that occurred last week.
GM India production in 2010
“This is a big setback for sentiment and can make India an unpredictable investment destination,” said one unidentified person working closely with Chinese companies, according to the Reuters report.
Additional major Chinese investments were also stalled, including those from PMI Electro Mobility Solution, which aimed to establish an electric bus manufacturing plant in Talegaon, and hydraulic equipment manufacturer Hengli Engineering.
Comments
Thailand, India, Vietnam, South Africa, Germany, France, Britain, Australia, New Zealand, plus a whole lot more countries GM has failed in. This is terrible and shows how badly managed GM is. Just for comparison Toyota is flourishing in all these countries
I wonder which side will the U.S. support. Both side have business ties with the U.S. so it depends which side is to blame before the U.S. steps in to stop a possible war (remember, both side have nuclear weapons). Since I have made friend with Indians during my work, and understand them more, I prefer to go with India. China already is in international trouble with their treatment of Hong Kong.
when it comes to money and the economy, the future is china not india. ask apple, gm, boeing, etc …
anybody who has ever been to india knows that place is rough to say the least.
india’s big initiative is building enough toilets so its citizens don’t have to relieve themselves in a field. i have no doubt they’ll screw up that modest goal with corruption.
but if the panda bear and the elephant want to nuke eachother, go for it. a nuclear war would cap 2020 perfectly.
They Chinese Communist Government’s recent actions and proclamations should render them toxic for any business relationship anywhere in the world at the present time. Seems India woke up in time.
It’s the CCP way of getting a little more of the pie world wide, We all should wake up fast Including GM and other domestic Auto makers as well!!