Hyundai and General Motors have signed a term sheet agreement. This deal attempts to explore the likelihood of buying GM’s India plant in Talegaon, Pune.
For your reference, the term sheet is a non-binding agreement that entails the terms and conditions of a proposed investment. This is often a precursor to a more detailed, legally-binding pact usually used for corporate mergers and acquisitions.
As we understand, this term sheet is likely to be valid for a stipulated time frame. This will happen only after the final sale agreement has been signed by Hyundai and after it has received legal clearances from various authorities. This includes a settlement with the retrenched Talegaon plant workers.
Talks Going On Since Last Year
From last year itself, there were talks that Hyundai was leading the race to acquire GM India’s Talegaon plant. The other contenders included Mahindra and Tata Motors. Production came to a halt in early 2020 at the Talegaon plant, which was set up in 2008. The facility has a manufacturing capacity of 1,30,000 vehicles and 1,60,000 engines per annum.
What Could Hyundai Do With The Talegaon Plant?
As per reports, Hyundai intends to manufacture the Venue compact SUV at the Talegaon plant. There are changes that it may use as a base for made-in-India vehicle exports.
Hyundai’s Plans For The Future
The South Korean carmaker has had the commitment to invest INR 4,000 crore till 2028. This will help in launching six electric vehicles (EVs) in the country.
Currently, Hyundai has its plant in Sriperumbudur, on the outskirts of Chennai. This facility operates at almost full capacity, thus, Hyundai Motor India would need additional manufacturing capacity to cater to the rising domestic and international demand. With the growing demand, the day is not far when Hyundai will need another manufacturing facility. Thus adding this property to its portfolio makes a lot of sense.
Also Read: All-new Hyundai Verna features for India revealed.