NEW DELHI/SHANGHAI, July 1 (Reuters) - General Motors (GM)
said on Friday it had 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.
GM struck a deal in January 2020 to sell the plant to Great
Wall, with the Chinese SUV-maker expected to pay up
to $300 million as part of a broader plan to invest $1 billion
to establish a presence in India's growing car market.
The agreement, which was extended twice, expired on June 30.
"We have been unable to obtain the required approvals within
the time frame of the deal," George Svigos, executive director
of communications at GM International, told Reuters.
"Our strategy in India remains unchanged and we will now
explore further options for the sale of the site," he said,
adding the company "hopes to achieve a price that reflects the
value of the asset".
"Great Wall Motor will keep its attention to the Indian
market in the future and continue looking for new
opportunities," the Chinese automaker said in a statement on
Friday, while confirming the termination of the plant deal.
The Indian government did not immediately respond to emails
GM's deal with Great Wall was agreed just months before
India toughened its stance in April 2020 on investment from
neighbouring countries including China, 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.
This was part of a broader crackdown by India on businesses
with Chinese links amid worsening diplomatic relations.
Separately, New Delhi also banned more than 300 Chinese mobile
apps, including TikTok, over security concerns.
"It is hoped that the relevant countries will properly honor
their commitment to openness and cooperation and provide a fair,
just and non-discriminatory business environment for foreign
investors, China's Ministry of Foreign Affairs told Reuters
when asked to comment on the matter.
The move draws a line under a more than two-year effort by
GM and Great Wall, forcing the U.S. firm to restart its hunt for
a buyer while it continues to spend money on maintaining some
machinery and tooling in the factory.
Asked if the plant could be used to make electric vehicles,
Svigos said it was suitable for a number of industrial uses,
including by non-automotive companies, and GM would explore all
GM, which stopped selling cars in India at the end of 2017,
has already sold its other plant to SAIC Motor Corp,
where the Chinese automaker builds cars under its British brand,
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 $1-billion investment earmarked for India and reassigned
some of its staff after delays in winning government approvals.
(Reporting by Aditi Shah, Zhang Yan, Martin Pollard
Editing by Mark Potter and Kim Coghill)