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    600104   CNE000000TY6

SAIC MOTOR CORPORATION LIMITED

(600104)
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End-of-day quote Shanghai Stock Exchange  -  2022-08-04
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GM calls off plan to sell India car plant to China's Great Wall

07/01/2022 | 12:18am EDT

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 seeking comment.

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 options.

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, MG Motor.

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)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
EURO / BRAZILIAN REAL (EUR/BRL) 0.10% 5.2591 Delayed Quote.-16.96%
GENERAL MOTORS COMPANY -0.47% 36.06 Delayed Quote.-38.50%
GREAT WALL MOTOR COMPANY LIMITED -1.63% 12.04 Delayed Quote.-54.33%
SAIC MOTOR CORPORATION LIMITED 1.01% 16.08 End-of-day quote.-22.06%
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Sales 2022 812 B 120 B 120 B
Net income 2022 25 482 M 3 769 M 3 769 M
Net cash 2022 61 998 M 9 169 M 9 169 M
P/E ratio 2022 7,30x
Yield 2022 4,09%
Capitalization 185 B 27 362 M 27 362 M
EV / Sales 2022 0,15x
EV / Sales 2023 0,11x
Nbr of Employees 15 059
Free-Float 22,8%
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Last Close Price 16,08 CNY
Average target price 19,99 CNY
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Xiaoqiu Wang President & Executive Director
Yong Wei Chief Financial Officer & Board Secretary
Hong Chen Chairman
Xiao Su Chen Chairman-Supervisory Board
Ruo Shan Li Independent Director
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