Since proposed the acquisition, Great Wall Motor Company Limited(601633) has failed to obtain the approval of local regulatory authorities for the acquisition of Indian factories from general motors.
On January 12, according to media reports, Great Wall Motor Company Limited(601633) reached an agreement with general motors on the acquisition of India’s talegaon plant on January 10, extending the acquisition period to March this year, up to June this year.
With regard to the reasons for the delay in the acquisition, Great Wall Motor Company Limited(601633) said that the acquisition project was not approved by the local regulatory authorities because GM had not reached an agreement on labor disputes with the workers of the Tarigan plant in India.
It is reported that as part of Great Wall Motor Company Limited(601633) global strategy, Great Wall Motor Company Limited(601633) signed an agreement with general motors in early 2020 to acquire the latter’s complete vehicle factories in India and Thailand.
Among them, the plant in Rayong, Thailand has already completed the acquisition in November 2020 and officially put into operation on June 9, 2021, but its acquisition of GM’s Tarigan plant in India has not been finalized.
in fact, Great Wall Motor Company Limited(601633) and GM reached an agreement on the acquisition of Indian factories as early as January 2020. at that time, it planned to acquire the plant for more than 20 billion rupees (about US $270 million), and planned to complete the transaction and final handover by the end of 2020.
But Great Wall Motor Company Limited(601633) said the agreement still needs the approval of the government and regulators.
Unfortunately, the transfer of GM’s Indian plant has been rejected by the local government since it proposed the acquisition.
However, with the continuous decline in the operating efficiency of GM’s Indian factory, GM decided to fire the factory workers, but it also received a summons. Therefore, the factory union filed a lawsuit to Pune Industrial Court, claiming that GM’s layoff was illegal. The court ruled that GM’s layoff was indeed illegal. It asked GM to still pay the monthly salary of workers and restrict its transfer of factory land until a formal ruling was made in the case.
With regard to the result of this judgment, George svigos, general international public relations director, said, “the company is still very confident in its legal position and has always acted in accordance with the law and the provisions reached between the labor union and the management.”
Regarding the cooperation with great wall, he said: “we have extended the investment terms with Great Wall Motor Company Limited(601633) because we are still committed to the plans related to the plant.”
Great Wall Motor Company Limited(601633) also did not give up the acquisition due to multiple delays. It said: ” Great Wall Motor Company Limited(601633) will continue its commitment to India, and our strategy for the Indian market has not changed.”
Great Wall Motor Company Limited(601633) is so “persistent”, which may be related to its capacity expansion plan in recent years.
In an interview with the media, the relevant person in charge of Great Wall Motor Company Limited(601633) group said, “the company has planned many new models and set the goal of annual sales of 4 million vehicles worldwide by 2025. The existing plant capacity can not meet the future development goal.”
The idle capacity of car enterprises with difficult operation is a further expansion of Great Wall Motor Company Limited(601633) existing capacity. In fact, Great Wall Motor Company Limited(601633) has indeed implemented several acquisition plans since this year.
In China, Great Wall Motor Company Limited(601633) acquired Jingmen cheetah automobile production base at the end of 2020; In June 2021, Great Wall Motor Company Limited(601633) officially signed a contract with Shangrao Municipal People’s government to take over hanteng automobile phase II plant; By the end of 2021, Great Wall Motor Company Limited(601633) in Daye, 350 kilometers away from Jingmen, will pocket Hanlong’s automobile production capacity.
In the context of globalization strategy, Great Wall Motor Company Limited(601633) also focuses on foreign poorly managed factories.
On August 18, 2021, Great Wall Motor Company Limited(601633) and Daimler Group officially signed an agreement on the acquisition of Mercedes Benz factory in Brazil. According to the asset acquisition agreement signed by both parties, the Brazilian irase mapolis factory, including land, plant, machinery and equipment, will be handed over to Great Wall Motor Company Limited(601633) .
The above Great Wall Motor Company Limited(601633) relevant person in charge said that the cost of acquiring such a second-hand factory is much lower than that of a new factory, and the production time will be greatly shortened. Great Wall Motor Company Limited(601633) is based on the principle of “resource saving, cost priority” to control the cost as much as possible.
