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Old 25th January 2016, 18:43   #1
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Default China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

China's biggest automobile manufacturer SAIC Motor Corp is planning to buy GM India's factory in Halol, Gujarat, as per a report in the Times of India. The talks are said to be in the advanced stages.

SAIC, which partners GM in China and holds a single-digit percentage share in the US company's India operations, is conducting a due-diligence of the Halol factory that GM will vacate by July as it focuses on operations through its plant at Talegaon in Maharashtra. Vacating a plant will not do much to recover costs since investments in Automotive plants are huge. Hence GM is looking at a sale to recover the investment and also ensure the plant is put to good use. Around 1100 people work in this plant and a sale and reuse would ensure that jobs are protected.

SAIC, which has partnerships with both GM and Volkswagen in China, will be the first Auto Manufacturer from China to start manufacturing in India. The company is expected to begin its India operations by contract-manufacturing GM India's models that are already being made at Halol, sources said. GM makes 'Cruze' sedan and 'Tavera' and 'Enjoy' MPVs at the factory.

SAIC is China's largest local manufacturer and in 2015 sold around 1.7 million vehicles. SAIC is looking at manufacturing in India to reduce costs.

GM India has not officially confirmed anything on this. Despite a presence of over two decades in India, GM has not been able to record profit so far and is estimated to be running accumulated losses of around Rs 4,000 crore. The company, which has issued massive car recalls in India, has a current market share of just 1.2% in the passenger vehicle segment. It sold 24,479 units in the first nine months of fiscal 2015-16.

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Source: ETAuto

Last edited by Rajeevraj : 25th January 2016 at 18:50.
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Old 25th January 2016, 19:19   #2
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Default re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

This news can be viewed both as a positive and negative one depending on how you look at it.

General Motors is the 3rd largest car-maker globally and despite being present in India from last 2 decades it has only 1.2% market share. It has good products in its line up like the Cruze, Beat, but these models are showing their age and there are no products which are on the verge of being unveiled and which can resurrect the company in the near future. Such a large manufacturer, not being able to gain a foothold in the market is surely a negative thing and being in accumulated losses of close top 4,000 crore is even worse. GM should do something about their future before they lose out even more. They need to bring in some huge changes and then hope for survival.

The good thing is that maybe now the factory can be fully utilized by SAIC and apart from producing the 'Tavera', 'Cruze', and 'Enjoy', they can also manufacture their own vehicles which can be exported back to China. The investments in such factories are not small and if GM can recover the costs, that would be best for them as that recovered amount can be invested at some other place for better results. And the best part is that the 1,200 employees of the factory will not be rendered jobless if the transaction takes place.
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Old 25th January 2016, 21:03   #3
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Default re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

Good riddance I say, they've made a complete hash of their India operations, but GM has never been able to make overseas subsidaries work, except maybe Vauxhall in the UK.

They are incapable of doing anything worthy of praise anywhere outside of America. Even their home stable is littered with dull products.
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Old 26th January 2016, 12:11   #4
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Default Re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

Honestly, I think this is just an eyewash. A gross misrepresentation of true intentions. Here's why I think so:

1. The buyer certainly raises a few eyebrows. SAIC has been a partner of GM India. The Gujarat government has made it amply clear that it won't allow GM to exit the state just like that. Certainly doesn't help GM that the ex-CM of Gujarat is now PM of India. This might just be a 'deal on paper' to allow GM to wash its hands off the GJ plant - I doubt the factory is ever going to build cars in the future. Of course, I'd be very happy to be proven wrong.

2. The Chinese are very astute businessmen who spend money wisely. SAIC knows that its products (Sail, Enjoy) were poorly received in the market. It's also aware that low cost can never be its forte in India. Maruti & Hyundai can offer better quality at the same / lower prices due to their economies of scale. It's also been amply proven that Indians buy on value, not a cheap price (prime example being the Nano).
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Old 11th February 2016, 17:11   #5
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Default Re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

Interesting developments.

Source & Full Article - Economic Times

The Gujarat government has said the company cannot sell the Halol plant unless it submits a settlement plan for the 1,100-odd employees working at the location.
GM's plan to pitch the plant to China's SAIC Motor Corp has also landed in trouble. Sources said that SAIC which holds a 9% stake in GM India and also partners the company in China wants a "clean slate" before it takes any decision regarding the plant. "SAIC has refused to take any liabilities, including the existing employees at Halol.

Apart from the settlement for existing employees, it has also sought settlement of tax-related cases," a source said. "Importantly, SAIC wants an assurance that fiscal incentives promised to GM India by the Gujarat government are passed on to the new buyer as this will add value to the deal."
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Old 12th April 2016, 10:54   #6
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Default The Chinese are coming!

SAIC and Great Wall are in separate discussions with the state government of Maharashtra in western India to set up a factory in the auto hub of Pune city, the state industries minister said.

A source close to SAIC said the company is considering Pune city among other locations. The automaker plans to set up a factory in India within the next three years and is in the early stages of researching such a move, according to the person.

Great Wall’s board of directors on March 7 voted unanimously in favor of a motion to establish a subsidiary in India, according to a stock exchange filing.

Chongqing Changan Automobile, China’s fourth-biggest automaker, launched a search in January for an advisor in India to help form an entry plan, according to an e-mail from the company to a consultant that was seen by Reuters.

Company President Zhu Huarong said in November that Chongqing Changan saw India as one of its three strategic foreign markets for investment and planned to start making cars there by 2020.
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