China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

Chinese auto manufacturer, Great Wall Motors, has just registered its Indian subsidiary, Haval Motor India, and is planning to dedicate up to Rs 7,000 crore in order to make a presence felt, and dominate the Indian market.

China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

Haval Motor India was registered before the month of October, and has its office registered at Gurugram. Registering before October means the company will not eligible for the low corporate tax that came into effect recently, and will continue to pay 25 percent tax against the 15 percent after the cut.

China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

Great Wall Motors is considering creating a new entity in India in order to pay lesser tax, and to redirect the funds towards research and development. The company has requested for a sit-down with Prime Minister Narendra Modi to discuss solutions. Speculation is that an official announcement of India-spec plans will be revealed after this meeting.

China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

The Chinese auto giant has been looking at land across five states — Andhra Pradesh, Gujarat, Karnataka, Maharashtra, and Tamil Nadu. Maharashtra has emerged as the strongest contender so far, followed by Gujarat.

China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

A spokesperson for Great Wall Motors said, "As of now, the company is looking at both greenfield and brownfield options in Maharashtra. It is considering the land acquired by Chinese truck maker Foton in Chakan near Pune."

China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

SAIC's Talegaon plant is the top contender. The facility is used by the company to manufacture cars for export. Officials from the Maharashtra Industry Department were in China last week to invite the company to the state.

China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

Great Wall Motors recently signed a Memorandum of Understanding with General Motors for use of the Talegaon plant, and the company could begin using the facility by mid next year. The company is interested in this facility because it would help speed up its debut in India to as early as mid-2021, instead of closer to the end of 2022.

China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

The China based manufacturer is seeking fresh concessions from the Maharashtra government as the earlier SOPS given to General Motors were utilized by them. Great Wall Motors had requested for a meeting with the Maharashtra Chief Minister's Office, but approval has been delayed thanks to the Assembly Elections in the state.

China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

An entry of Great Wall will increase competition in the utility vehicle segments. SAIC owned Morris Garages launched its mid-size Hector SUV earlier this year, has seen been doing very well.

China’s Great Wall Motors Forms India Subsidiary: To Invest 7,000 Crore

Thoughts About Great Wall Wanting To Invest Rs 7,000 Crore

7,000 crore seems about right. A new manufacturer making its way into the Indian market has to have a massive budget. We reckon about 1,000 crore out of that budget is exclusively for under-the-table payouts, and Maharashtra seems to be leading the bribe war. Slow clap.

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Read more on: #auto news
Article Published On: Monday, November 11, 2019, 13:43 [IST]
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