Hyundai Motor India said on Wednesday that it had signed an Asset Purchase Agreement (APA) to purchase a factory from US car manufacturer General Motors in the western state of Maharashtra.
Hyundai Motor buys GM plant in India
The South Korean car manufacturing group’s acquisition of the Talegaon plant in Maharashtra will lay the foundation to increase annual production capacity in India. Manufacturing operations at the plant are planned to commence in 2025, augmenting Hyundai Motor India’s manufacturing footprint by up to 1 million cars per year.
Hyundai, which, with its daughter Kia, is one of the world’s largest carmakers, did not disclose the purchase value. The deal covers the purchase and transfer of the land and buildings “as well as certain machinery and manufacturing equipment”, Hyundai said in a statement on Wednesday. The transaction is still subject to regulatory approval.
Announcing the APA signing, Unsoo Kim, Managing Director and CEO of Hyundai Motor India Limited (HMIL), commented: “This year is a significant milestone for Hyundai Motor India, as we celebrate 27 years of activity in the market.”
“Demonstrating our dedication to India, earlier this year, HMIL entered into a Memorandum of Understanding (MoU) to invest in Tamil Nadu for expanding capacity and establishing an electric vehicle ecosystem.”
“As we reinforce our commitment to ‘Atmanirbhar Bharat’ (Self-Reliant India), 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,” he concluded.
With the sale, General Motors is withdrawing totally from the Indian market. In 2017, GM stopped sales in India and announced that it would only focus on producing vehicles there for export to Mexico and Central and South America. That will now also come to an end.
GMI’s Talegaon plant has an annual production capacity of 130 000 units. Upon completion of the agreement, HMIL plans to expand its annual production capacity to achieve its strategic goal in the market.
Hyundai, which already operates two plants in India, wants to use the purchase to prepare for the country’s growing demand for electric vehicles. “India is one of the world’s most promising automotive markets, with a population of more than 1,4 billion as of 2023,” the Hyundai press release said.
“The country is currently considered one of the world’s top three automobile markets in terms of sales and aims to increase its electric vehicle sales to 30% of total car sales by 2030. Hyundai Motor India will review its plans to launch additional electric vehicle models into the Indian market in light of the expanded capacity,” it added.
Hyundai is number two in the South Asian country in terms of sales. The South Koreans sold 552 511 vehicles in India last year, taking a 14,5 % share, ranking second overall among automobile brands in India. The company is pushing to strengthen its production capacity to actively respond to the expansion of demand in the Indian automobile market, which has been in full swing since the end of Covid-19.