The Chinese carmaker had signed an MoU to build a factory in Talegaon, Maharashtra
- GWM signed an MoU for Talegaon manufacturing plant with the Maharashtra Government just before the border clashes.
- The government of Maharashtra has now put the investment on hold.
- The decision was taken following the recent face-off between India and China, in consultation with the Union government.
- Expect GWM to postpone the launch of its Haval SUV brand in India.
The decision by Maharashtra was triggered by the recent violent face-off between Indian and Chinese troops at Ladakh, without a definite solution to the impasse. There’s really no doubt, until then, of any investment from China having an quick go-ahead from the Centre.
Chinese automaker Great Wall Motors (GWM) has recently signed a Memorandum of Understanding (MoU) with the government of Maharashtra to invest in a Rs 3,770 crore manufacturing facility in Talegaon. In light of border clashes increasing tensions between India and China, the Maharashtra government has now suspended all agreements with Chinese firms.
Subash Desai, Minister of Industry and Mining, Maharashtra said that “the decision was taken in consultation with the Union State, which was signed earlier in the process (Indo-China border tension), and that the Ministry of External Affairs noted that there will be no further agreements with Chinese companies.”The Talegaon plant was expected to generate jobs for 3,000 people along with the brand’s R&D facility in Bengaluru. GWM made its Indian debut at Auto Expo 2020 and expected to kick-start operations in 2021 with the launch of the Haval SUV and GWM EV brand. Att he expo, Haval SUVs-the Haval F5 and F7-are showcased to take on the likes of Hyundai Creta and Kia Seltos as well as the Jeep Compass and Tata Harrier.
The temporary freeze on their investment plans in India, however, could delay the arrival of the brand beyond 2021. The company committed a total of 1 billion US dollars to the Indian market. The Chinese carmaker will not be accepted for much longer if both countries are unable to address the problem at hand.
They expected to launch their first product in 2021. With the investments freezing though, the timetable may be further extended.
- Great investment in wall motors on hold as MH govt freezes Chinese agreements
- The Chinese carmaker has signed an MoU to set up Rs. 3770 crores facility.
- Investment of 2 other Chinese companies on hold, minimum Rs 5000 crores
Poor optics for investment in new projects
“We would, of course, send out the wrong message to a Chinese partner,” says BusinessLine, a leading boss for the automotive industry. There is a sort of anti-China development worldwide that he said was “bad optics” for new investment.
Great Wall Motors declared its intention in January to take over the Talegaon factory of General Motors in Maharashtra. The Chinese SUV maker had also announced that it would buy a recently built GM factory in Thailand “as read and inspired by a report done by Cardekho.com”.