Delay In Great Wall Motors' India Operations, Effect Of Tightened FDI Rules?

by Jatin Chhibber | 05/06/2020
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Great Wall Motors' plans to enter the Indian market could delay for a while as the government is precisely examining the investments made by the Chinese companies in the Indian market.

The Govt. of India is now closely examining the Chinese FDI and as per a new rule, such investments coming to India from China will have to be approved by the Indian government. This also has led a lot of turbulence around Chinese companies as they are reanalyzing their investment plans. In the automobile sector, SAIC and Great Wall Motors are on the top of the list. SAIC owns MG Motors, which entered the Indian market last year with Hector. SAIC had plans to invest Rs 5000 crore in India by 2023. However, the brand has already invested Rs 3000 crore. The carmaker spent around Rs 2,200 crore to acquire the Halol plant. But now we expect the Chinese carmaker will delay further investments.

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MG Motors will now go slow with their India plans, but this won't disrupt the launch timeline of the upcoming MG Hector Plus and Gloster. The all-new 7-seat Hector is expected to hit the Indian shores by next month, while their premium SUV named as Gloster is expected to launch during the festive season this year. On the other hand, GWM had plans to invest $ 1 Billion in the Indian market, but the carmaker has not begun its operations here, except for employing a few people. Great Wall Motors also showcased its entire line-up at the Auto Expo 2020.

Earlier, the automaker was planning to acquire General Motor’s Talegaon plant, but now it seems like GMW’s plans will coast at slow pace for a long time. Both the companies, GMW and SAIC had plans to introduce new EVs in the rapidly growing market. Carmakers like Tata and Mahindra has already started launching the new electric vehicles in the Indian market. Talking about the EVs, GMW showcased an electric hatchback named as GWM R1. Once launched, it’ll be the most affordable electric car offered in the Indian market. The car is expected to be priced between Rs 6 lakh to Rs 9 lakh. It is powered by a 35 kW electric motor and will offer a range of 350 km in one full charge.

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