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Hyundai Motor India Limited (HMIL) has signed an asset purchase agreement (APA) for the “acquisition and assignment of identified assets” related to General Motors India (GMI)’s Talegaon plant in Maharashtra, the company said in a statement on Wednesday. The APA covers assignment of land and buildings and acquisition of identified assets at the GMI plant. HMIL signed the ‘term sheet’ for this acquisition five months ago.
Manufacturing operations at the plant are expected to commence in 2025 and will help boost HMIL’s manufacturing footprint. “With the Sriperumbudur (Chennai) and Talegaon plants, HMIL aims to cumulatively achieve a production capacity of one million units a year,” the company said in a statement. With the expanded capacity, HMIL will review plans to launch additional electric vehicle models into the Indian market, manufactured at its Sriperumbudur plant.
Unsoo Kim, MD & CEO of HMIL and Asifhusen Khatri, VP manufacturing of General Motors India and General Motors international operations, participated in the signing ceremony in Gurugram, Haryana. Apart from land and buildings, the APA covers the acquisition of machinery and manufacturing equipment.
The completion of the acquisition and assignment is subject to fulfilment of “certain conditions precedent and receipt of regulatory approvals from relevant government authorities and relevant stakeholders,” said the company statement.
Unsoo Kim, MD & CEO, HMIL said, “Earlier this year, HMIL entered into a Memorandum of Understanding to invest INR 20,000 crore in Tamil Nadu for expanding capacity and establishing an electric vehicle ecosystem. We intend to create an advanced manufacturing center for cars Made-in-India in Talegaon, Maharashtra. Our manufacturing operations are scheduled to begin in Talegaon, Maharashtra, in 2025.” The announcement is good news for the Talegaon plant which hit a roadblock when GM’s deal with Chinese company Great Wall, announced three years ago, did not get regulatory clearance. Auto industry analysts say problems with the residual labour force in the Talegaon plant has been one of the reasons why GM could not get a buyer after the Great Wall deal fell through. And while Hyundai reportedly showed interest in Ford’s Maraimalainagar plant at one point, nothing definitive happened and the discussions fell through. The Ford plant is yet to find a buyer.
GM India’s nearly 1,100 employees who did not accept the severance package and are represented by the General Motors Employee Union, have been a major stumbling block for finding a new buyer for the Talegaon plant. According to media reports, despite showing initial interest, both Tata Motors and Mahindra & Mahindra, stepped back primarily because of this reason. Media reports suggest GM reportedly received state government clearance for closure of the plant last month.
GMI’s Talegaon plant currently has an annual production capacity of 1.3 lakh units. Upon completion of the agreement, HMIL plans to expand the production capacity. HMIL intends to make phased investments for the purpose of upgrading the existing Talegaon plant.
