Business & Investment

Great Wall Motors Transfers Part of India’s Investment to Brazil After Delayed Approval-Source

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New Delhi / Beijing — Great Wall Motor has decided to redistribute a portion of its $ 1 billion investment in India to Brazil. This is due to a one-year delay for Chinese automakers to get government approval.

A popular sport utility vehicle (SUV) and pickup maker was on the verge of buying a car from its former Daimler plant in Brazil, which could cost up to $ 300 million, according to sources. It was done.

The Great Wall has also held India’s president James Yang responsible for supporting operations in Latin American countries since last year, sources who are directly aware of the issue said.

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“Brazil was a nearly completed deal and it didn’t make sense to keep blocking funds for India,” said one source, explaining the rationale for the change in focus.

The Great Wall move is the result of India’s April 2020 decision to scrutinize investment from China as part of a crackdown following a border clash between two Asian giants, sources said. Said.

Just two months ago, in a fanfare at India’s biennial car show, the Great Wall of China buys a former General Motors (GM) factory and builds cars there by manufacturing batteries and auto parts. He said he would invest $ 1 billion to do so.

Two sources said the redistributed funds budgeted by the Great Wall of India since 2020 were used primarily to purchase GM’s factories.

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The Great Wall declined to comment. The Government of India did not immediately reply to the email asking for comment.

This step highlights growing tensions and impatience among Chinese investors who have seen about 150 investment proposals, worth more than $ 2 billion, held by India’s slow approval process, according to industry estimates. ..

The delay has forced the Great Wall of China, which was scheduled to launch Indian-made Haval-branded SUVs this year, to consider taking a more cautious approach.

One source said he might consider entering the market with fully-manufactured imported cars before starting domestic production.

“With approval in India, the Great Wall of China would be ready with that money, but that may no longer be a direct decision,” sources said.

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“The company decides the situation before moving on. What if future approvals get stuck?”

Earlier this year, India planned to clear about 45 of China’s predominantly manufacturing investment proposals, but the number of approvals was not immediately apparent.

However, Indian officials say the situation cannot return to business as usual until the border deescalation is complete.

Chinese automakers will also wait for relations between the two countries to improve and the COVID-19 pandemic to ease in India before accelerating market planning, a second source said.

The Great Wall still wants to build a car in India and is currently building its supply chain, sources added.

When India began its global expansion, the company saw India as a major market and envisioned that its subcontinental factories would be the largest factories outside of China.

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The Great Wall of China currently manufactures cars in Russia and Thailand and acquired the plant when it announced plans for India.

Brazil is the latest market in the global impetus and plans to build a Haval-branded SUV for domestic sales and exports, sources said.

The Great Wall, which sold 1.1 million units mainly in China last year, is paying attention to its aggressive plans to expand in the Asian, European and Latin American markets.

Developed an electric mini vehicle at BMW and is constructing a factory in China with a German luxury automobile manufacturer. (Report by Aditi Shah in New Delhi and Yilei Sun in Beijing, edited by Clarence Fernandez)

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    Great Wall Motors Transfers Part of India’s Investment to Brazil After Delayed Approval-Source

    https://financialpost.com/pmn/business-pmn/great-wall-motor-to-shift-some-india-investment-to-brazil-after-approval-delays-sources Great Wall Motors Transfers Part of India’s Investment to Brazil After Delayed Approval-Source

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