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Hyundai signs term sheet to acquire GM car factory in India

By Park Sae-jin Posted : March 14, 2023, 11:13 Updated : March 14, 2023, 11:13

[Courtesy of Hyundai Motor]

SEOUL -- Hyundai Motor is pushing to acquire a foreign car factory in India for the first time since entering the Indian market in 1996. The company aims to increase its annual production to around 900,000 units and surpass the current leader Maruti Suzuki to take the top spot in the world's fourth-largest car market.
 
According to data released by Statista, a global market analyst firm, India's automobile market is rapidly growing at an annual average growth rate of about 3 percent and is projected to reach $25.5 billion by 2027. The top player in the Indian car market is Maruti Suzuki with about 46 percent market share in 2022. Hyundai is the No. 2 player with about 14 percent market share.
 
The Indian office of Hyundai auto group said in a statement on March 13 that the company has signed a term sheet regarding the acquisition of a GM car factory in Maharashtra. A term sheet is a legally-bound agreement document that outlines the material terms and conditions of a potential business agreement.
 
Hyundai, which made a foray into the Indian car market in 1996, established a factory in Chennai in 1998 and its second factory in 2008. The annual production capacity of Hyundai's Indian subsidiary is about 760,000 units, of which about 150,000 units are exported. The South Korean carmaker had been keeping its eye on an opportunity for the acquisition of other car factories owned by foreign car makers since its debut in India.
 
Currently, GM's car factory in Maharashtra has stopped production since 2020 after the American carmaker pulled out of India in 2017. The annual capacity of GM's factory was 130,000 units and 160,000 engines. GM pursued a factory sale agreement with Chinese sport utility vehicle maker Great Wall Motor until 2022, but the deal fell through. If Hyundai concludes this contract, the maximum annual production capacity of Hyundai's Indian subsidiary will increase to around 900,000 units. 

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