Soon after rival Indian automaker, Tata Motors, decided to take over Ford’s plant in Gujarat, Mahindra & Mahindra India began investigating the potential of buying General Motors‘ factory in Talegaon, Maharashtra.
According to those in the know, Mahindra executives have visited the Talegaon complex multiple times recently. The visits happened after the term sheet between GM and Great Wall Motors, a Chinese manufacturer that was in negotiations to buy the plant, ended on June 30.
In addition to Mahindra, the British automaker MG Motor has expressed interest in the GM facility. Although MG Motor’s investment might be subject to more scrutiny and take longer in India due to its Chinese ownership one of the reasons Great Wall withdrew from the negotiations GM may assign it a lesser priority.
Is it Really Going to Change Mahindra and Mahindra India’s Industry?
If negotiations between Mahindra and GM result in a deal, it would mark the second occasion when a domestic business helped a US automaker cut its investment in India.
Ford and General Motors have both abandoned the Indian auto industry. Five years after leaving this market, GM Enterprises is still looking for a buyer for the location, whereas Ford found a buyer for its facility just a year after making the decision to depart India in September of last year.
Earlier this month, Tata Motors said that it will pay less than $100 million to purchase the Ford factory. According to the sources, GM plant may sell its facilities for $60–$75 million, or less than Rs 600 crore.
Mahindra & Mahindra India‘s expansion plan will move along more quickly if a facility is put back into operation. General Motors has been using it to build cars for exports and will continue to do so through December 2020. With waiting times of between 12 and 18 months on some of its models, the maker of the XUV 700 and Scorpio N SUVs has roughly 240,000 pending bookings.
A new plant for producing a quarter million passenger vehicles will cost between Rs 4,000 and Rs 5,000 crore, plus another Rs 7,000 to Rs 8,000 crore for the supporting ecosystem. Experts claim that Mahindra would save money if it could buy GM India’s facility even for less than Rs 1,000 crore.
Mahindra Considers Strategic Acquisitions
Before settling on a manufacturing strategy, Mahindra would keep two to three options open, according to the executive director. Without mentioning the states, Jejurikar stated that the Mumbai-based company has already begun talks with a few state governments about establishing a new facility for electric vehicles.
According to experts, if Mahindra is successful in striking a contract with GM, it will prove to be a wise decision and the factory is thought to be a good fit for the company’s search for a dedicated EV factory. GM’s Talegaon plant is just about 20 kilometers from Chakan, but M&M has already announced capacity expansion at its current factory in Chakan.
With a complete automotive ecosystem surrounding it, GM India’s Talegaon factory meets Mahindra & Mahindra India’s criteria for a particular EV factory.
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