Hyundai Motor buys General Motors plant in Talegaon, India

Industry

Published: 13 Mar. 2023, 18:24

Hyundai Motor buys General Motors plant in Talegaon, India

General Motors' manufacturing plant in Talegaon, India [GM KOREA]

Hyundai Motor is acquiring a General Motors automobile plant in Talegaon, India, upping its bet on the world’s third-largest auto market.

The Korean automaker said Monday its Indian subsidiary signed a term sheet with General Motors to acquire its manufacturing facility in the western state of Maharashtra, India.

The size of the deal was not disclosed.

The Talegaon plant has an annual production capacity of 130,000, which will likely boost Hyundai’s production capacity in India to 1 million.

Hyundai currently has two plants in Chennai in Tamil Nadu in the southernmost part of India, with a capacity totaling 760,000. Hyundai plans to invest about 234 billion won ($178 million) to expand the capacity to 850,000.

General Motors withdrew from business in India in 2017, and the Talegaon plant ceased operations in October 2020 after two decades of production.

Hyundai employees work at its manufacturing plant in Chennai. [HYUNDAI MOTOR]

The acquisition came as the Michigan-based automaker’s initial deal with Baoding, China-based Great Wall Motors fell through last year.

Hyundai Motor has gradually expanded sales in India in recent years, becoming the No. 2 after Maruti Suzuki, according to data from the Society for Industrial and Applied Mathematics.

Hyundai Motor and Kia sold a total of 78,740 vehicles in the Indian market in January, an all-time high monthly figure, with the combined share increasing to 22.6 percent.

The record-high sales were led by small-size SUVs. First introduced in the country in 2015, a total of 15,037 Creta SUVs were sold in January, up 52.4 percent on year.

A total of 10,738 Venue SUVs and 10,470 Seltos SUVs were sold during the same period. For the first time the two products surpassed the 10,000 mark.

Nearly 7,900 Kia Carens minivans were sold, a 14-fold jump compared to same period the previous year.

Hyundai Motor is expected to introduce a fully revamped Xcent sedan in late March, selling them under the Verna name.

Xcent was discontinued in Korea in 2019, but is being exported to markets that prefer small-size vehicles, including India, China and Russia.

Hyundai started accepting Verna orders last month.

India has the world’s third largest auto market, after China and the United States and ahead of Japan. Around 4.73 million vehicles were sold in India alone last year, up 25.7 percent.

Hyundai Motor hopes to sell 595,000 vehicles in India, up 7.2 percent. That is the fourth largest year-on-year increase after China, Korea and North America.

In 2020, Hyundai Motor bought the General Motors car factory in St. Petersburg, Russia.

BY SARAH CHEA [chea.sarah@joongang.co.kr]