Hyundai to acquire General Motors' Talegaon Plant? Term sheet signed

By Varun SinghHyundai Motor India today announced that it has signed a term sheet with General Motors India for the potential acquisition of identified assets related to the latter’s Talegaon plant in Maharashtra.

A term sheet, which is a non-binding agreement, outlines the basic terms and conditions of an investment. It is usually followed by more detailed documents, which are legally binding.

“The term sheet covers the proposed acquisition of land and buildings and certain machinery and equipment for manufacturing situated at General Motors India, Talegaon plant,” Hyundai said in an official statement.

“The proposed acquisition is subject to the signing of the ‘Definitive Asset Purchase Agreement’ and fulfilment of conditions precedent and receipt of regulatory approvals from relevant government authorities and all the stakeholders related to the acquisition,” it added.

Established in 2008, the Talegaon plant has an annual installed production capacity of 130,000 units. It can also produce 160,000 engines every year. While General Motors India stopped selling cars in the country in 2017, the production of export models at the Talegaon plant continued till late-2020.

The Talegaon plant also boasts facilities like a logistics distribution centre, training centre, project management building, administrative office building and public facilities centre.

General Motors India has been trying to find a buyer for the Talegaon plant for a long time now. Apart from Hyundai Motor India, the list of potential buyers included homegrown giants like Tata Motors and Mahindra & Mahindra.

In January 2020, Great Wall Motor signed an agreement to acquire the Talegaon plant from General Motors India. A memorandum of understanding was also signed with the Maharashtra government. Great Wall Motor even announced an investment of USD 1 billion in India in a phased manner. However, the pact failed in mid-2022, following which Great Wall Motor made an exit from India.

Apart from selling the plant, another concern for General Motors India is the protesting workforce (1,086 retrenched workers). The carmaker is engaged in a legal battle with them.

Hyundai Motor India has a manufacturing facility near Chennai with an annual installed production capacity of 760,000 units. The company’s Chief Operating Officer Tarun Garg recently told India Today that the capacity will be increased to 820,000 units in 2023.

The carmaker recorded its best-ever domestic volumes during a calendar year at 552,511 units in 2022. However, it witnessed stiff competition from Tata Motors as the company posted passenger vehicle volumes of 526,798 units in 2022 and was merely 25,713 units behind Hyundai Motor India in the domestic market.

If the Hyundai-General Motors deal for the Talegaon plant goes through, it will immensely benefit the maker of the popular Creta SUV to enhance its supplies.

Hyundai Motor India sells 12 models — Grand i10 Nios, i20, i20 N Line, Aura, Venue, Venue N Line, Verna, Creta, Alcazar, Tucson, Kona Electric and Ioniq 5. It will launch the sixth-generation Verna on March 21.