India pushes back China’s Great Wall Motor, approvals subject to improvements in border row

According to three sources familiar with the matter at hand, China’s Great Wall Motor has decided to re-allocate a portion of its $1-billion investment in India to Brazil following a year-long delay in winning government approvals.

The development comes in the wake of the Chinese army encroaching on Indian territory border areas with India, mirroring its navy’s moves in the South China Sea.

Last year, Great Wall has tasked its India president James Yang, with the responsibility of assisting operations in Brazil. said sources with direct knowledge of the matter.

“Brazil is almost a done deal and it did not make sense to keep the funds blocked for India,” said a source.

In April 2020, India moved to increased its scrutiny of Chinese investments in the country following a border clash between the two countries.

Great Wall declined comment.

The Indian government did not immediately respond to requests for comments.

Approval 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. The Chinese company may consider entering the India’s burgeoning car market with a fully-built imported vehicle before starting domestic production, said a source.

“When approvals in India come through, Great Wall will be ready with the money, but it may not be a straight decision anymore,” said the source. “The company will judge the situation before moving forward. What if future approvals get stuck?”

According to Indian officials, approvals of Chinese investment in India cannot be treated as routine business as usual until de-escalation at the border is complete.

Great Wall will wait for ties between the two countries to improve and for the COVID-19 pandemic to ease in India before it implements its spending plan for the market, said a source.

The lure of the burgeoning Indian market is very strong, said a source. Great Wall is building its supply chain in the country.

The Chinese company sees the Indian car market as a key market when it kicked off its global expansion, envisioning its plant in the subcontinent to be its biggest outside China. Currently, it has plants in Thailand and in Russia;

It plans to build a plant in Brazil in its global push, where it plans to build its Haval brand of SUVs for domestic sale and export, said sources.

Great Wall is developing electric Mini cars with BMW and is building a factory with the German premium carmaker in China.

Categories: Creativity, Entrepreneurship, HR & Organization, Strategy

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