GM called off the sale of a shuttered Indian plant to China’s Great Wall Motor after they failed to obtain regulatory approvals, amid a tougher stance by New Delhi towards investments from Beijing. The Chinese SUV-maker was expected to pay up to US$300 mln as part of a broader plan to invest US$1 bln to establish a presence in India’s growing car market.
The agreement, which was extended twice, expired on June 30. Sporkperson of GM said to the media that Within the agreement time range, they were unable to obtain the necessary approvals. But that doesn’t make changes to their plan in India.
They are looking for more options for the sale. They expecting a offer that reflects the value of the asset. He added.
Great Wall Motors confirmed the termination of the deal but still intended to keep their attention to the Indian market and looking forward to more opportunities.
GM’s deal with Great Wall of China was agreed just months before India toughened its stance on Chinese investment, making them the first major casualty of the move that has held up billions of dollars of capital inflow in sectors such as automobiles and technology. The Indian government did not immediately respond to emails seeking comment.
The move draws a line under a more than two-year effort by GM and Great Wall to find a buyer for the plant. Svigos said the site could be used for industrial uses, including by non-automotive companies, and the company would explore all options.
This will also send Great Wall back to the drawing board on its plans to enter India, which it considered an important part of its global strategy to break into new markets like Latin America, Thailand and Brazil.
Last year, Great Wall re-allocated to Brazil a portion of its US$1-bln investment earmarked for India and reassigned some of its staff after delays in winning government approvals.
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