Hyundai Motor Co.’s Indian arm is set to acquire General Motors’ Talegaon plant in Maharashtra, a strategic move that not only enables the U.S. automaker’s exit from the Indian market but also propels Hyundai’s annual production capacity.
By adding the Talegaon facility to its existing Sriperumbudur plant near Chennai, Hyundai is embarking on a mission to elevate its combined annual production capacity to an impressive one million units, as announced on Wednesday.
For context, the company’s production capacity for the first half of this year stood at 820,000 units.
Hyundai, India’s second-largest car manufacturer in terms of sales, has underlined its plans to enhance the Talegaon plant’s infrastructure, with manufacturing operations scheduled to commence by 2025.
The current capacity of the plant is pegged at 130,000 units per year.
Although the financial details of the acquisition remain undisclosed, the deal signifies a significant strategic shift for both companies. For General Motors, this move marks its exit from the Indian market.
The U.S. automaker halted its car sales operations in India in 2017 due to sluggish demand.
However, a full withdrawal has been tangled in complexities, including legal disputes with workers and difficulties in finding a suitable buyer for the plant.
The Talegaon plant had previously been on the brink of acquisition by China’s Great Wall Motor in 2019, but the deal fell through amidst regulatory hurdles and heightened scrutiny of Chinese investments by Indian authorities.
Last week, Hyundai revealed its ambitious plans to introduce a greater range of electric vehicles under its Hyundai and Kia brands in India.
This move underscores the automaker’s strong belief in the potential of the world’s third-largest automobile market.
A substantial investment of $2.45 billion has been earmarked by Hyundai to bolster EV production within the country.
This move resonates with the company’s optimism regarding the local consumer appetite for electric vehicles, signalling a significant step towards India’s electric automotive future.