Great Wall Motor has decided to re-allocate to Brazil a portion of its $1bn investment in India, as the Chinese automaker has been unnerved by a year-long delay in winning government approvals, three sources told Reuters.
Great Wall has also tasked James Yang, its India president since last year, with the responsibility of assisting with operations in the Latin American nation, said the sources, who have direct knowledge of the matter.
The re-allocation, which could range up to $300m, comes as the sources said the maker of popular sport-utility vehicles (SUVs) and pick-ups was close to acquiring a former Daimler plant in Brazil to build cars.
“Brazil is almost a done deal and it did not make sense to keep the funds blocked for India,” said one of the sources, explaining the rationale for the change of focus.
Great Wall’s move is a fallout of India’s decision in April 2020 to more closely scrutinise investments from China, the sources said, as part of a crackdown that followed a border clash between the two Asian giants.
Just two months before, amid the fanfare of India’s biennial car show, Great Wall had said it would invest $1bn to build cars there, by buying a former General Motors (GM) factory, as well as making batteries and car parts.
Two of the sources said the re-allocated funds, budgeted by Great Wall for India since 2020, would mainly have been used to buy GM’s factory, a cost that sources had earlier put at about $300m.
Great Wall declined to comment. The Indian government did not immediately reply to an email seeking comment.
Growing nervousness
The step highlights growing nervousness and impatience among Chinese investors, who have seen roughly 150 investment proposals worth more than $2bn held up by India’s slow approvals process, according to industry estimates.
The delays are forcing Great Wall, which was expected to begin selling its India-made Haval brand of SUVs in the country this year, to look at taking a more measured approach.
It may even consider entering the market with a fully-built imported vehicle before starting domestic production, one of the sources said.
“When approvals in India come through, Great Wall will be ready with the money, but it may not be a straight decision any more,” said the source.
“The company will judge the situation before moving forward. What if future approvals get stuck?”
No business as usual
Earlier this year, India had been set to clear about 45 of the investment proposals from China, mainly in manufacturing, but it was not immediately clear how many had been approved.
However, Indian officials say the situation cannot return to business as usual until de-escalation at the border is complete.
The Chinese automaker will also wait for ties between the two nations to improve and for the COVID-19 pandemic to ease in India before speeding up its plans for the market, said a second source.
Great Wall still wants to make cars in India and is now building its supply chain, the source added.
The firm saw India as a key market when it kicked off its global expansion, envisioning its plant in the subcontinent to be its biggest outside China.
Great Wall now makes cars in Russia and Thailand, where it acquired a plant at the time it announced its India plans.
Brazil is the latest market in its global push, where it plans to build its Haval brand of SUVs for domestic sale and export, the sources said.
Great Wall, which sold 1.1 million cars last year, mostly in China, is eyeing an aggressive plan to expand in Asian, European and Latin American markets.
It is developing electric Mini cars with BMW and is building a factory with the German premium carmaker in China.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
