India has rejected a bid by Chinese carmaker Great Wall Motor to purchase a manufacturing plant from General Motors (GM).
The decision leaves the fate of the factory near Pune, in the western state of Maharashtra, in doubt.
GM stopped selling cars in India in 2017 and used the plant only to build vehicles for export to South America.
The rejection by New Delhi is part of a tougher attitude towards investments from China, including from Chinese car companies.
GM struck a deal in January 2020 to sell the plant to Great Wall, with the Chinese SUV-maker expected to pay up to $300 million as part of a broader plan to invest $1 billion to establish a presence in India’s growing car market.
“We have been unable to obtain the required approvals within the timeframe of the deal,” George Svigos, executive director of communications at GM International, said.
Electric Cars Are an Option
“Our strategy in India remains unchanged and we will now explore further options for the sale of the site,” he said, adding the company “hopes to achieve a price that reflects the value of the asset”.
GM’s deal with Great Wall was agreed just months before India toughened its stance in April 2020.
The Chinese car company is the first major casualty of the move that has held up billions of dollars of capital flowing into sectors such as automobiles and technology.
This was part of a broader crackdown by India on businesses with Chinese links amid worsening diplomatic relations, which intensified after a bloody clash on the countries’ Himalayan border in mid-2020.
Separately, New Delhi also banned more than 300 Chinese mobile apps, including TikTok, over security concerns.
The move draws a line under a more than two-year effort by GM and Great Wall, forcing the US firm to restart its hunt for a buyer while it continues to spend money on maintaining some machinery and tooling in the factory.
Asked if the plant could be used to make electric cars, Svigos said it was suitable for a number of industrial uses, including by non-automotive companies, and GM would explore all options.
- Reuters, with additional editing by George Russell