Hyundai Motor (KS:005380) is set to acquire General Motors' (NYSE:GM) Talegaon plant located in the western state of Maharashtra. This strategic step not only facilitates the departure of the U.S. automaker from the Indian market but also helps to supplement Hyundai's annual manufacturing output.
Hyundai revealed Wednesday that the automaker plans to utilize the Talegaon plant, along with its Sriperumbudur facility outside Chennai city to increase its production capacity to one million units per year. The company reportedly had a production capacity of 820,000 units in the first half of 2023.
Hyundai did not mention how much the deal is valued. However, the firm said it intends to upgrade the existing infrastructure at the Talegaon unit and start manufacturing in 2025. The plant currently has an annual production capacity of 130,000 units.
This agreement will facilitate GM’s departure from the Indian market. General Motors ceased car sales in the country back in 2017 due to declining sales over the years. However, the full withdrawal from the market has been hindered by challenges such as legal disputes with employees and the inability to locate a buyer for the manufacturing facility.
The American automaker had reached an agreement to sell the facility to China's Great Wall Motor back in 2019, but the deal fell through after the companies failed to obtain regulatory approvals as New Delhi raised concerns surrounding Chinese investments.
Shares of GM are down 0.13% in pre-market trading Wednesday.