Earlier this week, China’s Great Wall Motor announced that it is shelving its ambitious $1 billion India investment plan. The move follows delays with the Indian government, which had failed to grant approval for foreign direct investment (FDI) by the Chinese carmaker. The company also had problems in obtaining permission for a former General Motors plant in India, which it wanted to purchase. A government spokesperson was not immediately available for comment outside of regular business hours. The company said it would award three months’ severance to its employees, but did not specify what the severance payments would be.
The decision came as a surprise to many, but the timing was not ideal. The deal with GM came after New Delhi increased scrutiny of investment from its bordering countries, which has held back billions of dollars in capital. While the company had actually hired several dozen employees in India, it was not able to secure approval to invest in the Indian auto market.
After the decision to pull out of India, Great Wall Motor is now exploring other international markets. The company previously considered India a key frontier for international expansion, and considered other countries such as Thailand and Brazil. Despite its limited success, the Chinese automaker is still making progress in developing electric vehicles. It also plans to continue to review the Indian market. The company will continue to keep an eye on India, but it will not invest $1 bln unless the rift with India is resolved.
The Chinese automaker has ceased all plans to enter India and has reassigned all of its Indian employees. Its plans to enter India were finalized just months before India toughened its investment policy. It has shifted the $1 billion investment to Brazil and has been reassigning staff. But despite the move, the Chinese company will continue to study the Indian market and seek new ways to innovate and enter the market.
The Chinese automobile manufacturer Great Wall Motor Company Limited is a Chinese private corporation. It was founded in 1984. Today, the company is the eighth largest automaker in China, selling vehicles under its own brand names. The company also manufactures electric vehicles and has EV brands dedicated to those vehicles. In 2011, the company began operations in Tianjin. It plans to sell its vehicles in a number of other regions, including the United States, Saudi Arabia, Australia, and Chile.