GM cancels plan to promote Indian automobile manufacturing facility to Nice Wall of China

The new GM logo is seen on the facade of 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) It said on Friday it had stopped selling a closed India plant to China’s Great Wall Motor after it failed to gain regulatory approval, amid New Delhi’s tough stance. for investments from Beijing.

GM reached an agreement in January 2020 to sell the factory to the Great Wall (601633.SS)with the Chinese SUV maker expected to pay up to $300 million as part of a broader $1 billion investment plan to establish a presence in India’s burgeoning car market.

The deal, which has been renewed twice, expires on June 30.

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“We were unable to obtain the necessary approvals within the timeframe of the agreement,” George Svigos, GM International’s chief communications officer, told Reuters.

“Our strategy in India remains unchanged and we will now explore more options for selling websites,” he said, adding that the company “hopes to achieve prices that reflect value.” of property”.

“Great Wall Motor will continue to pay attention to the Indian market in the future and continue to seek new opportunities,” the Chinese automaker said in a statement on Friday, confirming the factory contract termination.

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

GM’s deal with the Great Wall was agreed just months before India stepped up its stance in April 2020 on investment from neighboring countries, including China, making them a big victim. The first of the moves has already held billions of dollars in capital pouring into sectors like Automotive and Technology.

This is part of India’s broader crackdown on businesses with links to China amid deteriorating diplomatic relations. New Delhi alone also banned more than 300 Chinese mobile apps, including TikTok, because of security concerns.

China’s foreign ministry told Reuters when asked for comment on the matter: “It is hoped that the countries concerned will properly honor their commitments to openness and cooperation and provide a favorable environment.” fair, equitable and non-discriminatory business for foreign investors.

The move draws a line in a more than two-year effort by GM and Great Wall, forcing the American company to restart its hunt for a buyer while continuing to spend money on maintenance on some of its machinery and tools. factory.

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

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

This will also bring Great Wall back to the drawing board on its plans to enter India, which is seen as a key part of its global strategy to enter new markets such as Latin America, Thailand and Brazil. .

Last year, Great Wall reallocated to Brazil part of its $1 billion investment in India and reassigned some of its staff after delays in winning government approval. . read more

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Reporting by Aditi Shah, Zhang Yan, Martin Pollard Edited by Mark Potter and Kim Coghill

Our standards: Thomson Reuters Trust Principles.

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