SAIC looking to enter India by acquiring GM’s Halol Plant

SAIC (Shanghai Automotive Industry Corporation), GM’s Chinese partner who owns a small stake in GM India, is reportedly planning to make vehicles in India. The Chinese automaker is conducting a due-diligence of GM India’s Halol plant in Gujarat which is otherwise phasing shutdown by July this year, reports Times Of India.

According to TOI’ sources, if the deal attains fruition, SAIC may start its operations by contract manufacturing cars for GM India. Currently the Cruze, Tavera and Enjoy are being made at Halol plant. The company is reported to be in advanced stages of negotiations with GM India and both entities are keeping the concerned Gujarat government officials in the loop. GM India is said to be working towards passing on the fiscal incentives from the state government to the new buyers.

SAIC is reportedly planning to commence its Indian operations by entering into contract manufacturing agreement with GM India.

Once it frees itself from the Halol plant, GM India will concentrate on making its Talegaon operations more productive. The Halol plant has an annual production capacity of 1.1 lakh units and employs around 1,100 people. The new buyer is expected to retain a good number of the existing personnel.

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If the GM India-SAIC deal gets finalized, SAIC will become the first Chinese automaker to successfully set up its manufacturing operations in India. SAIC may explore contract manufacturing of more car brands in India or study the market to introduce its own brands in the future.

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