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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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Related Thread: General Motors India loses nearly 60 dealerships in India (General Motors loses nearly 60 dealerships in India)

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

Quote:
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.
Quote:
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!

Quote:
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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Old 26th January 2017, 22:12   #7
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Default Re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

GM India may be looking to strengthen itself financially by selling the Halol plant to a subsidiary of Chinese partner SAIC. The potential sale just got cleared by the Competition Commission of India:

Quote:
The acquisition of General Motor’s Halol plant by a subsidiary of SAIC Motor Corp, China’s largest automaker, has inched closer to completion, with the Competition Commission of India (CCI) clearing the proposed acquisition, according to reports.

In line with its decision to stop production at its plant in Halol, Gujarat, which was set up in June 1996, GM was scouting around for a buyer for it. Around end-2016, it is learnt that a subsidiary of SAIC Motor Corp applied to the Competition Commission of India (CCI) to acquire these assets of GM India.
Source

I have no idea which subsidiary of SAIC is set to buy the plant from GM, but if the Chinese automaker is planning to enter the Indian passenger vehicle market, then I do hope they bring in the British MG brand (which they own).

It would great sense for SAIC to enter India with a once-famous name like MG (Morris Garages). The ol' MG brand would be far better received in India than any unknown Chinese brandname.

Last edited by RSR : 26th January 2017 at 22:14.
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Old 27th January 2017, 06:49   #8
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Default

Question is how many of us will go and buy a Chinese made car?

I personally would hesitate a bit.

MG would be lovely to have, though, as would SAAB.
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Old 27th January 2017, 12:49   #9
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Default Re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

Quote:
Originally Posted by shankar.balan View Post
Question is how many of us will go and buy a Chinese made car?

I personally would hesitate a bit.

MG would be lovely to have, though, as would SAAB.
The chinese themselves hesitate to buy chinese car brands. Despite the multiple soft loans & waivers, heavy Govt. support and subsidies, regulatory pressures on foreign carmakers, the local brands still struggle to have a real impact.

Before anyone comes up with the often heard excuse that people said the same about the Japanese and the Koreans, the chinese auto industry is more than 60 YEARS OLD!!

While the visible build quality have improved by leaps and bounds, they are still plagued by poor reliability, inconsistent quality, jugaad engineering etc....

This video from china is very enlightening.........(that said I am impressed with their car retail area.....its like a giant bazaar with cars spread out like produce!)



What countries need to be aware of is that china will dump production if one is not careful about import regulations. They will flood the market by the thousands with irrationally low prices. If the Indian Govt. lets its guard down even for brief moment the impact it can have on the domestic industry and its workers will be huge!
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Old 5th March 2017, 16:56   #10
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Default Re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

Wonder what's next with GM. And how SAIC uses this plant, if and when the sale takes place.

Quote:
Gujarat's first car manufacturing plant set up by General Motors (GM) India at Halol near Vadodara is set to shut down next month. With the March 2017 deadline for discontinuing production at the facility nearing the end, the company is readying itself to close the plant sometime in April.
http://timesofindia.indiatimes.com/a...w/57475258.cms
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Old 5th March 2017, 18:06   #11
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Default Re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

This would be 2nd Chinese OEM setting up factory in Gujarat.

AMW trucks is already making cheaper trucks and selling them across India.

As an Indian, i would not like to see any Chinese setting up their manufacturing units in India.

It's time Indians need to think twice before buying Chinese things!
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Old 5th March 2017, 18:49   #12
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Default Re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

Can governments keep such clauses where the company needs to ensure relocation of the existing work force in the event that they want to exit and shut down the business?
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Old 5th March 2017, 20:29   #13
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Default Re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

It seems GM is also struggling in Europe.

Peugeot poised to buy GM's Opel, creating European car giant

Source: http://www.reuters.com/article/us-op...-idUSKBN16B0AU
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Old 11th September 2017, 10:35   #14
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Default Re: China's SAIC in talks to buy GM's Gujarat factory. GM to vacate by July 2016

SAIC announces over Rs 2,000 crore investment in India operations.

Chinese carmaker in final stages of acquiring GM factory in Halol. Will upgrade plant and increase capacity to 80,000 units per year. To launch two models by 2020.

Quote:
we will launch two products in two years. Our first launch would be in 2019 and the second will be in 2020
Quote:
However, to be truly cost-competitive, SAIC is planning an ambitious localisation programme, which is where a big chunk of the initial investment will be deployed.

According to company sources, the first model, will be launched with a local content level as high as 75 percent and this could rise to 90 percent beyond 2022, depending on production volumes
Quote:
non-committal about the models SAIC will first launch.
Link

Last edited by volkman10 : 11th September 2017 at 10:39.
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