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In a shocking turn of events, Great Wall Motors abandoned its plans to enter India and has fired all its employees in the Indian office after operating in the country for 2.5 years.
Great Wall Motors (GWM) was established in 1984 and initially sold only trucks. It began selling passenger vehicles in 2010 and has launched two very popular brands since then: Haval and WEY. Today, the company is headquartered in Baoding, China, and has a presence in over 60 countries.
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In January 2020, the company announced its plan to enter India, four years after it set up a research facility in Bengaluru. It was going to take over the General Motors plant in Talegaon with an aim to invest $1 billion in a phased manner for vehicle R&D, manufacturing plants, component manufacturing as well as EV and battery production.
General Motors and GWM had signed an agreement according to which GWM would be acquiring the Talegaon plant and the Rayong, Thailand plant. The Rayong plant was ready to operate under new ownership around April 2021, but the Talegaon plant was waiting for government approval.
However, the approval was delayed. Both parties had to extend the timing of the date sheet twice, once in H1FY22 and the second in January 2022. A deal that was expected to be completed by December 2020 was not approved by government authorities for 2.5 years.
The deal cost the company dearly as the company's country head James Yang had to be transferred to its Brazilian subsidiary while its Director for Sales and Marketing, Hardeep Singh Brar, resigned to work for Kia Motors India. People had suspected the deal to fall through if the deal wasn't carried out by the end of the term: June 2022.
Ultimately, the company announced its exit as soon as July 2022 began. The company fired its last 11 employees with a three months severance package. This marks another Chinese company's sacrifice to Indian regulatory hurdles as another noteworthy Chinese company that aimed to enter India but couldn't was Changan Automobile.
The stock of GWM has been consistently declining ever since November 2021. The stock declined 74% from $34.50 per share to $9.11 per share in a span of 6 months. However, the stock showed signs of revival in mid-May as it bounced back and reached $17.78 per share in two months. It closed at $16.14 per share in the last trading session.
Article by Aman Agarwal.
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