China's Great Wall Motor signs MoU with Maharashtra, reaffirms plan to invest USD 1 billion

Great Wall Motor, the latest Chinese automaker to enter the Indian market, signed a memorandum of understanding with the Maharashtra government on Tuesday agreeing to invest in modernising its Talegaon manufacturing plant and generate employment for 3,000 people.

The company reaffirmed its plan to invest $1 billion (Rs 7,600 crore) in the Indian market as announced during the Auto Expo in February this year.

Parker Shi, managing director of GWM India, in a press statement thanked the Maharashtra government and said the cooperation could hopefully turn into a great business opportunity for both the parties.

“This would be a highly automated plant in Talegaon with advanced robotics technology integrated in many of the production processes," Shi said. GWM had acquired the plant at Talegaon near Pune from General Motors earlier this year for a consideration of about Rs 1,000 crore

The announcement comes at a time when anti-China sentiments are rising on social media as many blame India’s north-eastern neighbour for the outbreak of the novel coronavirus. The skirmishes between the Indian and Chinese armed forces in Ladakh are also fuelling this sentiment.

“It’s becoming a nationalist issue post the 'Vocal for Local' call given by the Indian Prime Minister earlier this month. Any Chinese company looking to set up operations, will see a delay in decision making,” said the chief executive of a leading automotive company, asking not to be named, ET reported earlier this month.

Brand consultants had said that while the sentiment on social media was against Chinese automakers, in the market the impact could not be as significant as Chinese companies usually have deep pockets to afford pricing their products aggressively. Vehicles sold by MG Motor, a British brand marketed by SAIC, a Chinese company, have been received well in India with monthly sales exceeding 3,000 units before the Covid-19 pandemic.

GWM’s billion-dollar plan includes establishing two brands in India – Haval and GWM EV. While the former will cater to all types of SUVs, the EV brand will house non-SUV electric vehicles.

The acquisition of an existing plant will ensure that the new entrant will have a locally-made product in the market as early as next year, the company said.

A carmaker known for its backward integration in the value chain, Great Wall will also bring to India its critical parts supply-base – an expense part of the billion-dollar investment. The company owns about 70 firms that make components for its vehicles and has also invested in a lithium mining company, ensuring a stake in the entire EV value-chain.


Jun 16, 2020

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