Hyundai Motor India (HMIL) has entered into a landmark deal with General Motors India (GMI) to purchase the latter’s Talegaon plant situated in Maharashtra. The agreement includes acquiring the land, specific machinery, and manufacturing equipment, with a vision to start production by the year 2025.
While the exact monetary figure of the acquisition remains undisclosed, it is known that the plant possesses an annual production capacity of 130,000 units.
Earlier this year, HMIL had already increased its production capacity at the Sriperumbudur plant in Tamil Nadu from 750,000 to 820,000 units. The additional capacity from the GMI plant will enable HMIL to lay the groundwork for an impressive 1 million units per annum.
Unsoo Kim, HMIL’s managing director and chief executive officer, expressed the company’s ambition to establish an “advanced manufacturing center for made-in-India cars” in Talegaon. Furthermore, the manufacturing operations are scheduled to commence in 2025.
The second-largest carmaker in India after Maruti Suzuki, HMIL has big plans for the future. In the long run, HMIL aims to utilize the expanded capacity for the potential introduction of new electric vehicle models in the Indian market, produced at its Sriperumbudur plant.
This major acquisition was not without its complexities. Earlier in March, HMIL had signed a term sheet with GMI for the potential takeover of assets at the Talegaon plant. However, the deal’s completion is contingent upon certain prerequisites and obtaining regulatory approvals from relevant government authorities.
On the labor front, General Motors employees’ union, representing approximately 1,000 employees of the Maharashtra plant, is in an ongoing dispute with GMI, seeking to secure employment with HMIL and wages for the interim period. Though the legal matters are sub-judice, the union is determined to fight until the end, according to Sandeep Bhegade, president of the General Motors Employees Union.
Attempts at mediation between GMI and the employees’ union earlier this year, as directed by the Pune Industrial Court, have not resulted in an agreement, and the union has subsequently filed a petition in the Mumbai High Court.
The implications for the employees and whether they will be absorbed by HMIL in the new plant remain unclear. This transaction stands as a significant move in India’s automotive industry, signaling Hyundai’s commitment to growth in the region.
The news is based on a business-standard.com article.