After Great Wall Motor backed out, GM India’s plant in Talegaon near Pune will now be bought by Hyundai India
In a groundbreaking development that heralds a new era for India’s automotive industry, Hyundai Motor India Limited (HMIL), the country’s pioneering smart mobility solutions provider and largest exporter, has officially inked an Asset Purchase Agreement (APA) for the acquisition of designated assets linked to General Motors India (GMI)’s Talegaon Plant in Maharashtra.
The signing ceremony, held in Gurugram, Haryana, was attended by Mr. Unsoo Kim, Managing Director and CEO of Hyundai Motor India Ltd., and Asifhusen Khatri, Vice President Manufacturing of General Motors India and General Motors International Operations. This agreement, a significant stride for Hyundai, encompasses the acquisition of land, buildings, machinery, and manufacturing equipment located at GMI’s Talegaon plant.
Conditions Precedent and Regulatory Approvals
The completion of this transaction hinges on meeting specific conditions precedent and obtaining regulatory approvals from relevant governmental bodies and stakeholders. Mr. Kim emphasized the significance of this endeavour, stating, “This year marks a pivotal milestone for Hyundai Motor India as we celebrate 27 years of operations in the market. We remain committed to India, evident from our earlier Memorandum of Understanding (MoU) to invest INR 20,000 crore in Tamil Nadu to expand capacity and establish an electric vehicle ecosystem. With the establishment of an advanced manufacturing center in Talegaon, Maharashtra, we aim to reinforce our dedication to self-reliant manufacturing and launch production operations by 2025.”
India’s Promising Automotive Market
India’s automotive market, boasting a population exceeding 1.4 billion in 2023, ranks among the world’s most promising. The country is vying to position itself among the top three global automobile markets, and it aims to have electric vehicles account for 30 percent of total car sales by 2030.
With 552,511 vehicles sold in India last year, Hyundai Motor seized a remarkable 14.5 percent market share, securing second place overall among automobile brands. As of the most recent month, the company has sold 346,711 vehicles this year, maintaining its second-largest share in the Indian market at 14.6 percent. The ongoing expansion of demand following the pandemic’s abatement has spurred Hyundai to bolster its production capacity to meet this fervent demand.
Capacity Augmentation and Future Goals
Presently, GMI’s Talegaon plant possesses an annual production capacity of 130,000 units. After the agreement’s finalization, HMIL is poised to amplify this annual capacity, inching closer to its strategic objective. Given that Hyundai has already elevated its production capacity from 750,000 units to 820,000 units within the first half of this year, augmenting the GMI plant’s capacity paves the way for a remarkable milestone—a combined production of around 1 million units annually.
Seizing this enhanced capacity, HMIL is poised to introduce more electric vehicle models to the Indian market. These vehicles will be produced at the company’s Sriperumbudur plant, accelerating India’s electrification aspirations. This strategic move is projected to invigorate Hyundai’s business prospects while bolstering its position in the Indian automotive sector.
Strategic Investments and Progress for Humanity
Strategically investing in Maharashtra, Hyundai’s actions mirror its global vision, “Progress for Humanity.” The company’s investments are poised to play a pivotal role in India’s economic growth, fostering a robust industrial ecosystem that propels progress and positively impacts local communities.
With a phased approach, HMIL intends to invest in enhancing existing infrastructure and manufacturing equipment at the Talegaon Plant. This investment is directed at aligning the plant with Hyundai’s Global Operating and Manufacturing Standards, ensuring the production of automobiles that epitomize manufacturing excellence.