Hyundai signs deal to acquire General Motors’ Talegaon manufacturing plant

The South Korean carmaker has not revealed the amount it will pay the American firm to purchase the plant, which has an annual production capacity of 130,000 units.

“Since HMIL already has enhanced its production capacity (at the Sriperumbudur plant in Tamil Nadu) from 750,000 units to 820,000 units in the first half of this year, the capacity augmentation of the GMI plant will lay the foundation for HMIL to produce around 1 million units a year,” said HMIL in a statement.

Unsoo Kim, managing director and chief executive officer of HMIL, said that the company intends to create an “advanced manufacturing center for Made-in-India cars” in Talegaon. “Our manufacturing operations are scheduled to begin in Talegaon in 2025.”

HMIL, which is the second largest carmaker in India, had in March this year signed a term sheet with GMI for potential acquisition of the assets at the Talegaon plant.

“The completion of the acquisition and assignment (of Talegaon plant is subject to fulfilment of certain conditions precedent and receipt of regulatory approvals from relevant government authorities and relevant stakeholders,” said HMIL.

As per the direction of the Pune Industrial Court, a mediator earlier this year held two rounds of negotiations between GMI and the employees’ union, but the out-of-court talks did not yield any results. The union has filed a petition in the Mumbai High Court on this matter. It is unclear whether these employees will be hired by Hyundai at its new plant.

GMI signed a deal with Great Wall Motors in January 2020 to sell the Talegaon plant, but the agreement fell through in June last year as the Chinese carmaker did not receive approvals from the Indian government in time. General Motors stopped production at the Talegaon plant in 2020.

In May this year, HMIL signed a pact with the Tamil Nadu government to invest Rs 20,000 crore over a period of 10 years to establish electric vehicle (EV) battery pack assembly unit, develop new EV and internal combustion engine (ICE) vehicle, and boost manufacturing capacity of its Sriperumbudur plant.

HMIL is the largest car seller in the country after Maruti Suzuki India. Its market share in the passenger vehicle market is 14.58 per cent as compared to Maruti’s 41.3 per cent. In FY23, HMIL sold 567,546 units domestically, marking a jump of 17.87 per cent year-on-year, according to the SIAM data.

In FY22, Hyundai posted a profit after tax of Rs 2,861 crore, which was an increase of 54 per cent year-on-year. Hyundai India plans to introduce six electric vehicles (EVs) by 2028, according to Kim, who spoke to Business Standard in January.

“HMIL (Hyundai) was the first company to launch a long-range electric SUV (sport utility vehicle), Kona Electric, in 2019. As we continue to redefine the mobility space, we have announced phase-wise investment of Rs 4,000 crore towards developing six electric vehicles in India by 2028,” he had said.