Soon after another Indian automaker, Tata Motors, decided to take over Ford’s plant in Gujarat, Mahindra & Mahindra (Mahindra) began investigating the potential of purchasing General Motors’ (GM) factory in Talegaon, Maharashtra.
Mahindra is examining a strategic purchase: While declining to comment specifically on Mahindra or MG, a GM India spokeswoman did mention to ET that “GM is continuing to investigate options for the sale of the site.”
It would be the second instance of a domestic company assisting a US automaker in reducing its investment in India if talks between Mahindra and GM result in an agreement. Ford and GM have both abandoned the Indian auto industry. GM is still looking for a buyer for the site five years after leaving this market, but Ford found a buyer for its facility within a year after its announcement to leave India in September of last year.
Tata Motors said earlier this month that it will buy the Ford facility for just under $100 million. According to the sources, GM may sell its facilities for $60—$75 million, or less than Rs600 crore. Mahindra will be able to move on with its growth plan more quickly by getting a factory up and running; GM has been utilizing it to produce cars for exports until December 2020. The company that makes the XUV 700 and Scorpio N SUVs has roughly 240,000 unfilled orders with waiting lists of 12 to 18 months for some of its models.
An investment of Rs4,000—5,000 crore and an additional Rs7,000—8,000 crore for the supporting ecosystem are needed to build a new factory that can produce a quarter million passenger vehicles. Experts say it would be cost-effective for Mahindra to buy GM India’s plant even for less than Rs1,000 crore.
The complex “remains a well-maintained, cutting-edge industrial site, with strong ties into the supply chain and transport networks,” according to the GM spokeswoman. Mahindra has announced a capacity increase at its current Chakan facility. Chakan is only approximately 20 miles from GM’s Talegaon factory.
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