NEW DELHI, March 13 (Reuters) – Hyundai Motor Co (005380.KS) said on Monday it has agreed to a potential acquisition of General Motors’ (GM.N) plant in India, a move that could finally allow the U.S. automaker to exit a country where it stopped making cars in 2017.
A final deal is subject to meeting certain conditions including obtaining “regulatory approvals from relevant government authorities and all stakeholders related to the acquisition”, Hyundai said in a statement.
GM stopped selling cars in India in 2017 after years of dwindling sales but its complete exit from the market has been marred by complications, including legal tussles with workers and the failure to find a buyer for the plant which is in the western Indian state of Maharashtra.
In 2019, GM agreed to sell the plant to China’s Great Wall Motor (601633.SS) but talks collapsed last year after the companies failed to obtain regulatory approvals amid New Delhi’s increased scrutiny of investments from Beijing.
GM and its factory workers – who allege illegal termination after the company decided to exit – have also been locked in legal battles since 2021. In the latest setback, in January, a union sued GM’s India unit and its global CEO for failing to pay court-ordered compensation to sacked factory workers.
GM has previously said its employees have been legally separated and it remains confident of its legal position.
India has been a tough battleground for Western carmakers, especially U.S. companies, that have struggled to break the dominance of Japan’s Suzuki Motor (7269.T) and South Korea’s Hyundai Motor (005380.KS), which together hold 60% market share. Like GM, Ford Motor (F.N), too, ceased operations in India.
This acquisition will give Hyundai a second plant in India allowing the carmaker to boost production capacity at a time when it plans to launch six electric vehicles in India by 2028.