China’s Great Wall Motor has shelved plans to invest $1 billion in India and laid off all employees at its operations after failing to obtain regulatory approvals. Three sources with direct knowledge of the matter said on Friday.
The Chinese automaker has been planning to enter the Indian market since 2020 but has now become one of the biggest casualties of New Delhi’s increased scrutiny of investments from Beijing.
Without directly commenting on the exit, a Great Wall statement said the company “would like to thank all the members of the Indian team for their contribution”, adding that it would continue to study the Indian market and look for opportunities in the future.
The sources, who declined to be named, said that Great Wall laid off about a dozen employees at its Indian business on Friday after telling them it had failed to obtain foreign direct investment approval from the government to buy a former General Motors (GM) plant in the country.
Earlier on Friday Great Wall and GM called off the plant deal, drawing a line under a two-year initiative. An Indian government spokesperson could not immediately be reached for comment outside regular business hours.
GWM in India
In 2020, China’s most considerable SUV manufacturer agreed with General Motors to acquire the latter’s Talegaon plant near Pune. The company also participated in the Auto Expo of 2020.
Great Wall Motor became the last car maker after Changan, Haima, and Chery who had to drop plans of an India foray after failing to scale the regulatory hurdle amid the worsening geopolitical situation between the nuclear-armed neighbors.
A spokesperson confirmed the development, stating that the company was unable to secure the requisite approvals within the timeframe.
“The term sheet for the sale of the Talegaon site between GWM and GM expired on June 30, 2022, but we have been unable to obtain approvals within the timeframe. Hence, both parties decided to terminate the transaction. The project lasted two-and-a-half years,” said the spokesperson.
GWM added that the company would continue to pay attention to and study the Indian market, and “look for opportunities with the hope to provide a new experience for Indian consumers with innovative products in the future,” the spokesperson added.
Having extended the term sheet twice and the $1-billion Great Wall Motor proposal stuck in federal clearance for more than two years, the US carmaker was compelled to look at alternatives for the plant’s sale.
Interestingly, India was seen as a key frontier in Great Wall Motor’s international expansion along with Thailand and Brazil. While the operations in South East Asia and Latin American countries have kicked off, the Indian proposal has been stuck.
Over time, the key executives steering India plans were diverted to global markets and the team hired locally has almost halved, with key executives in the critical role of business development, sales and marketing, and strategy moving on to other automotive companies.
