Hyundai Motor Group agreed to acquire a manufacturing facility from General Motors (GM) in India, as the Korea-based automaker is looking to expand in the world's third-largest auto market.
Reuters and Pulse News reported that Hyundai and GM signed an asset purchase agreement to acquire the latter's facility in Talegaon, Maharashtra. The plant has an annual production capacity of 130,000 units. Combined with Hyundai's other India-based facilities in Sriperumbudur, Tamil Nadu, Hyundai is expected to expand its Indian production capacity to one million a year.
GM decided to exit India in 2017. However, the US carmaker encountered setbacks during the selling process due to several challenges, including legal issues with workers and a failure to sell the plant to China-based Great Wall Motor as the Indian government has tightened its scrutiny against Chinese investments.
India surpassed Japan as the third-largest auto market behind the US and China in 2022. Despite the exit of GM, global automakers are hoping to seize the opportunity in India by expanding their investments. V. G. Ramakrishnan, managing partner at Avanteum Advisors, told Nikkei Asia that global carmakers realized that if they wanted to compete with local rivals in India, they had to get the price right. For them to get the pricing right, they had to get the volume right.
Following announcing an investment of US$2.45 billion to expand Hyundai's presence in India, Hyundai in August revealed its plan to introduce five EV models in India by 2032 and install more charging stations by 2027. The Korea Economic Daily reported that Hyundai planned to use the Talegaon factory to make EVs dedicated to the Indian market.
Source: Vahan Dashboard, August 2023