General Motors had already stopped selling cars in India, but their plant in Pune was operational for exports
One of the first brands to setup a car manufacturing plant in India (1996), is all set to wind up its operations completely from the country. After stopping domestic operations in 2017, and selling their Halol plant to MG Motor, General Motors India has decided to shut its operations down at their only remaining plant in India, reveals a Times of India report.
GM has been using this Talegaon plant near Pune for manufacturing cars for international markets. The primary export of the Talegaon plant has been the Beat hatchback which it was exporting to Mexico. In fact, for Oct 2020, Beat was the most exported car from India. A total of 5,075 units of Beat were exported.
The Talegaon plant currently employs around 1,800 salaried and hourly workers. These will be paid salaries till Jan 2021, while the legal and administrative staff will be with the company till March 2021.
Earlier Plans
However, in a bid to consolidate its overall operations, GM has now decided to completely exit India. In the start of 2020, it was expected that GM will be handing over its Talegaon plant to Great Wall Motors. GM was planning to sell its plant to Great Wall Motors, a China-based auto manufacturer which was readying itself to enter India.
In fact, at the 2020 Auto Expo, Great Wall Motors had a large pavilion and looked very confident of launching a range of SUVs for the Indian market sometime soon. However, the rising border tensions between the two Asian giants didn’t help the case for Great Wall Motors.
GM and Great Wall Motors had signed a binding term sheet and the deal of Hand-Over-Take-Over of the plant was expected to close in H2’20. First, the Covid-19 related uncertainties delayed the execution but majorly it was the skirmish between the Indian-Chinese border troops in the month of June which came out as the death knell for the deal. After the June’20 incident, Maharasthra’s government announced that it was putting the GM-GWM deal on hold.
Chinese Investments put on deep scrutiny
Post June’20, the Indian government had brought in rules which would allow the Indian side to deeply scrutinize major investments from neighbouring countries. The rule was brought in place to primarily keep a check on investments which were pouring in from China.
In the current environment, chances of Great Wall Motors coming to India look relatively bleak. It was planning to drive its Haval brand in India and introduce a line-up compromising of SUVs and electric vehicles. It had planned to invest around $1 billion in the country and was planning to provide direct employment to around 3,000 individuals.
Now, GM will have to work its way around the entire closure process of its plant. It will have to offer a mutually acceptable severance package and also take required permissions from the Maharashtra government to lay off its workers. With low chances of the Talegaon’s plant’s assembly lines coming back to action anytime soon, GM has found itself in a tight spot in this separation process.
