SAIC signs deal with General Motors to take over Halol plant
SAIC Motor Corp in its filing with the Shanghai Stock Exchange on Wednesday said it has entered an agreement with the General Motors over the Halol plant.Updated: Apr 05, 2017 19:38 IST
China’s largest automaker SAIC Motor Corp has signed a deal with General Motors to buy its GM India’s Halol plant in Gujarat, the company said in a filing with the Shanghai Stock Exchange on Wednesday.
The company did not disclose anything more on the agreement in its Shanghai filing.
The Shanghai-based manufacturer and the American giant had been in talks regarding the handover of the plant, where GM India started making Opel cars in 1996, and Chevrolets from 2003. The facility with an annual production capacity of 110,000 volumes was underutilised over the last few years due to its falling sales and failure to revive with no good product mix.
Last year, Detroit-headquartered General Motors pulled back its $1 billion investment in India amid falling sales and consequent plunge in market share. The company will end operations at the Halol plant on April 28.
SAIC, formerly Shanghai Automotive Industrial Corporation, will take over the plant’s operations as it plans to enter India soon. The Competition Commission’s had already given approval to SAIC Motor HK, part of China’s SAIC Motor Corp, in January this year to acquire certain assets of the Halol plant.
In China, SAIC Motor Corp makes cars in joint ventures with General Motors Co and Volkswagen AG in addition to own-brand vehicles. The company in its Shanghai Stock Exchange filing also reported a 7.4% jump in 2016 profits, though missing its own expectations marginally.
Meanwhile, General Motors India will continue making cars at its Talegaon factory near Pune which has annual capacity of 170,000 volumes. The Chevrolet India-parent last month also signed a three-year wage agreement with 2,500 workers of the Talegaon plant. Under the wage pact for the period April 1, 2017 to March 31, 2020, the average salaries of the employees will go up by Rs 22,000 at the end of the period.
Detroit is also taking a good second look at GM’s India plans now, since none of its recent products have failed to steer a turnaround for the company.
First Published: Apr 05, 2017 17:56 IST