China's largest automaker, SAIC Motor Corporation Limited, after officially announcing its entry into the Indian automobile market, has now signed a memorandum of understanding (MoU) with the Gujarat government to invest £200 million for setting up an auto plant in Halol near Vadodara. It has reportedly been in negotiation to acquire General Motors' closed car manufacturing plant in Halol.
The proposed passenger and commercial vehicle plant which is expected to begin production in 2019, will initially make 50,000 to 70,000 units and will expand production depending on demand and market conditions, the Gujarat government said in a statement. Chief Minister Vijay Rupani tweeted, “Chinese auto giant SAIC has signed an MoU for investment of over £200 million in the state.” The statement said, “The Chinese company decided to invest £200 million over the next five years, after weighing other sites in India. The company will employ about 1,000 persons. The state government will provide registration, permission, and other forms of support.”
Just last week, SAIC had announced plans to set up its first car plant in India, which will be operated through its fully-owned subsidiary MG Motor India.
GM's plant in Halol was closed down on April 28 this year. “With issues involving labour of Halol facility set to be resolved, the deal to acquire the plant could be reached in the near future,” a source said, refusing to provide any time period for the deal to materialize. SAIC is looking to bring British sports car brand MG (Morris Garages) to India. In addition to SAIC, as many as five ancillary industries will also invest in India. These ancillary units include Yang Feng, Huichoung, Waling Industry, Ling Yun and Sevic.