SAIC Poised to Purchase Indian Manufacturing Assets from General Motors
According to Reuters, a filing with India’s competition watchdog on Friday reveals that a subsidiary of Chinese carmaker SAIC Motor Corp plans to acquire Indian manufacturing assets belonging to its partner, General Motors.
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The acquisition of these assets would be done by way of an Indian SAIC subsidiary—one that has not as yet been incorporated—and would provide the automaker with the opening necessary to become a force in the burgeoning market. As a condition of the deal, GM would buy out SAIC’s 9.2% stake in SAIC General Motors Investment, which was formed in 2009 as a means to expand into emerging markets.
A GM rep confirmed to Reuters that the automaker and SAIC are working to obtain approval for the sale of its Halol plant. The plant, located in Gujarat, has a max annual output of 110,000 vehicles a year. GM also operates a manufacturing facility in Talegaon that has a max output of 170,000 annually.
General Motors has previously asserted that it intends to be profitable in India by 2020. It is also expected that India will become the world’s third-largest new car market by 2020. GM’s sales in India have not been as strong as it anticipated, and it has taken to using its additional capacity to manufacture vehicles for exports to other international markets such as Mexico.
General Motors’ spokesperson told Reuters that it will “share any progress at the appropriate time.” SAIC declined comment.
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News Source: Reuters
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