Hyundai Motor Signs Final Contract to Acquire GM India Plant... Secures Annual Production Capacity of 1 Million Units

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Hyundai Motor Company is targeting the Indian market, the world's third-largest automobile market, by acquiring GM India’s Talegaon plant. Through this acquisition, Hyundai plans to secure an annual production capacity of 1 million units in India and actively pursue its electrification strategy.

On the 16th (local time), Hyundai Motor announced that it signed the main contract to acquire the assets of the Talegaon plant from GM India (GMI) at Hyundai Motor India (HMI) located in Gurugram, Haryana, India. If preconditions such as approval from the Indian government are met within this year, Hyundai will fully secure the rights to the land and facilities of the GM Talegaon plant. The acquisition amount will not be disclosed by mutual agreement.

The Talegaon plant has an annual production capacity of approximately 130,000 complete vehicles. Full-scale mass production is scheduled to begin in 2025. Additionally, Hyundai is considering plans to further expand the plant’s production capacity through phased facility improvements.

Earlier this year, Hyundai increased the production capacity of its Chennai plant from 750,000 to 820,000 units through line improvements in the first half of the year. Considering this acquisition and future expansion plans, Hyundai’s total production capacity in India will increase to a maximum of around 1 million units. As the production capacity for internal combustion engine vehicles is additionally secured, Hyundai plans to utilize the spare capacity at the existing Chennai plant for new electric vehicle production lines.

Last year, Hyundai recorded a market share of 14.5% in India, ranking second in the industry after Maruti. This year, it has maintained second place with a 14.6% market share as of last month. With the acquisition of the Talegaon plant, Hyundai plans to expand the supply of high-demand core models and establish a system that allows for rapid model deployment depending on future market conditions.

Production line at Hyundai Motor's Chennai factory in India
Photo by Hyundai Motor

India, with the world’s largest population, is the third-largest automobile market globally after the United States and China. New car sales reached approximately 4.76 million units last year, with the passenger car market accounting for about 3.8 million units. It is expected to exceed 5 million units by 2030.

Moreover, the Indian government recently announced a goal to increase the share of electric vehicle sales to 30% of total vehicle sales by 2030, raising expectations for growth in the electric vehicle market. Last year, electric vehicle sales in India were about 48,000 units, representing only 1.2% of total passenger car sales. However, compared to just three years ago, this figure has more than tripled, and sales in the first half of this year are approaching last year’s annual sales, indicating rapid growth. Industry experts forecast that annual electric vehicle sales in India will reach around 1 million units by 2030. A Hyundai official stated, "To proactively respond at the start of full-scale electric vehicle market expansion, local production of electric vehicles with product competitiveness and price competitiveness that meet market needs is essential."

Hyundai entered the Indian market in 1996 by establishing a sales corporation. Since the completion of the Chennai plant in 1998, cumulative local investment has reached $6.5 billion as of last year. The direct and indirect employment effect is estimated at around 250,000 people. In May this year, Hyundai signed an agreement with Tamil Nadu, where the Chennai plant is located, to invest 200 billion rupees (approximately 3.2 trillion won) over 10 years starting this year. This is to actively pursue an electrification strategy in India, including the creation of an electric vehicle ecosystem and modernization of production facilities. Hyundai is also leading efforts to build the ecosystem by establishing a battery pack assembly plant and installing 100 high-speed chargers at key locations.

Once the acquisition of the Talegaon plant is completed within this year, it is expected to activate a series of investments related to the formation of the automobile value chain, including attracting parts suppliers and establishing logistics systems, in addition to direct investment. Hyundai explained that such direct and indirect investments will naturally lead to the expansion of the automobile industry ecosystem and revitalization of the local economy.

Kim Eonsu, Vice President and Head of Hyundai Motor’s India, Asia, and Middle East region, said, "This year will mark a new milestone in Hyundai’s 27-year history in India. Starting with the full-scale operation of the Talegaon plant in 2025, we will build a state-of-the-art manufacturing hub that can contribute to the Indian automobile industry."

This content was produced with the assistance of AI translation services.