Chinese automobile manufacturer Great Wall Motors (GWM) is reportedly planning to shift portions of its $1 billion investment in India to Brazil, according to three sources cited by Reuters in a recent report.
The move comes after months of delays in the firm’s wait for regulatory approval to initiate operations in the country following a crackdown on foreign direct investment (FDI) by Indian central authorities last April.
While GWM has not responded to a request for comment, an executive was quoted by Chinese state-backed Global Times, insisting that India remained a key foreign market for the firm and that they would “invest in India as always.”
However, given the dawdling process for Chinese firms attempting to obtain approval from Indian authorities of late, “it did not make sense to keep the funds blocked for India,” according to one of the unnamed sources cited in the Reuters report.
GWM’s $1 billion investment in the Indian market was first announced at the February 2020 Indian Auto Expo in Noida outside the capital city of New Delhi. As part of the vision, the Hebei-based firm aimed to provide approximately 3,000 direct employment positions in India, calling the country “a preferred investment destination for most auto companies.”
Another core component of GWM’s plans in India involved its January 2020 purchasing of a vehicle manufacturing facility operated by US-owned General Motors, located in Talegaon in the country’s western state of Maharashtra.
Despite having signed a further memorandum of understanding (MoU) last June, plans to commence operations at the site have so far been stymied. The excitement seen at last year’s Auto Expo, which saw much speculation about GWM’s intended launch of an all-electric SUV for the Indian market, has all but vanished.
In the time that has elapsed since the $1 billion investment’s announcement, relations between the world’s two most populous countries have soured. Deadly border skirmishes in the remote Himalayan region of Ladakh, which dragged on throughout the summer months of last year, prompted central and Maharashtra state officials to temporarily put off major investments by Chinese firms, including GWM.
Over a year since the signing of the MoU, it appears GWM has grown tired of waiting. According to the sources cited by Reuters, James Yang, the chief of the automaker’s operations in India, has now been transferred to focus on the Brazilian market.
Adding to GWM’s woes, Prime Minister Modi’s administration has pursued an increasingly protectionist economic agenda recently, mandating state approval for all Chinese investments last April and repeatedly emphasizing the goal of bringing about atmanirbhar Bharat, or a ‘self-reliant India.’
Founded in 1984, Great Wall Motors is China’s leading manufacturer of SUVs and pick-ups. The automaker, which sold 1.1 million vehicles in 2020, fulfilled an IPO at the Hong Kong Stock Exchange in 2003 followed by a second listing in Shanghai in 2011.
In addition to its ambitious international expansion plans, GWM chairman Wei Jianjun announced last month the firm’s goal of selling 4 million cars annually by 2025 – 80% of which will be new energy-based.
Shares in the automaker are up during Thursday trading in Hong Kong, adding 1.90% to settle at HK$34.95 ($4.49) per share at the time of publishing.