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Hyundai Motor India Limited (HMIL) has signed a term sheet for the potential acquisition of identified assets related to General Motors India’s Talegaon Plant, Maharashtra, the company confirms in a statement on Monday.
The term sheet covers the proposed acquisition of land and buildings, and certain machinery and equipment for manufacturing situated at General Motors India, Talegaon plant. The proposed acquisition is subject to the signing of the ‘Definitive Asset Purchase Agreement’, and fulfillment of conditions precedent, and receipt of regulatory approvals from relevant Government Authorities and all the stakeholders related to the acquisition. It should be noted that GM is embroiled in an embittered legal battle with the retrenched workers, and mediated talks between the two adversarial parties have failed to arrive at a consensus.
It was widely reported that HMIL was the favourite to lay hands on the defunct manufacturing facility, in a three-way battle which also saw Mahindra & Mahindra and Tata Motors entering the fray. GM stopped manufacturing at the Talegaon plant—which was commissioned in 2008 and has a manufacturing capacity of 1,30,000 vehicles and 1,60,000 engines—in early 2020, after exiting the Indian market in 2017. GM had a presence in the Indian market for over two decades, and had invested in $1.4 billion in the country. It had earlier planned to sell the facility to China’s Great Wall Motor (GWM), but the sale was called off after GWM failed to make the mandated investments to assume control of the plant, and the agreement expired on June 30 last year.
HMIL, on the other hand, has earmarked an investment of ₹4,000 crore in India by 2028, and has also unveiled plans to launch six electric vehicles (EVs) in the country. It is also understood that HMIL needs incremental capacity as homegrown carmaker Tata Motors is on the heels of HMIL to become the second-largest carmaker, and has already acquired Ford’s manufacturing capacity in Sanand, Gujarat, to have enough headroom for incipient demand, especially for its electric vehicles. HMIL currently has a single manufacturing facility in Sriperumbudur, in Tamil Nadu, where it manufactures passenger vehicles both for the domestic and international markets, and is understood to be running at full capacity.
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