Korean auto major Hyundai Motor said it has signed a term sheet for potential acquisition of General Motors’ manufacturing facility at Talegaon in Maharashtra. “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,” Hyundai Motor India said in a statement.
The non-binding agreement, which will be valid for a stipulated period of time, outlines the terms and conditions of the proposed acquisition. Hyundai is likely to sign a final agreement once it receives approval from government authorities and a settlement is reached with the retrenched workers of the Talegaon plant.
“The proposed acquisition is subject to the signing of the ‘definitive asset purchase agreement’ and fulfilment of conditions precedent and receipt of regulatory approvals from relevant government authorities and all the stakeholders related to the acquisition,” the company’s statement said.
Industry sources say that Hyundai has been a frontrunner in the race to acquire GM’s Talegaon facility after China’s Great Wall Motor (GWM) shelved its plan to enter the Indian market amid increased scrutiny of Chinese investments by Indian authorities. The Indian government has tightened checks on investments by Chinese companies after the skirmishes between Indian and Chinese troops along their disputed border. Mahindra & Mahindra and Tata Motors, too, the sources said, are in the fray to acquire the unit. GM had halted production at the Talegaon facility in December 2020.
With its manufacturing units near Chennai operating at full capacity, the additional capacity in Talegaon will help Hyundai Motor India meet domestic and overseas demand for its vehicles.
Last fiscal, Hyundai invested ₹1,474 crore to expand production capacity at Sriperumbudur to 850,000 units. This additional capacity will come on stream in June 2023. Hyundai to introduce a sub-compact SUV in the mainstream market in the next financial year. The company is also investing ₹4,000 crore to roll out half-a-dozen EVs across segments to grow its footprint in the fast-evolving market for EVs in India. Given its proximity to the port, the Talegaon facility – which has capacity to assemble 130,000 vehicles and 160,000 engines per annum – is likely to be utilised by the Korean automaker to scale up exports of Made-in-India vehicles.
