Indian automaker Mahindra & Mahindra and China's Shaanxi Automobile Group have agreed to establish a $3 billion joint venture to build a car manufacturing plant in India, said a report exclusive to Reuters. However, in a stock exchange statement, Mahindra has denied this report.
According to the report, the plant is proposed to be set up in Gujarat and will include an export-oriented, integrated manufacturing hub for assembled cars, engines, and car batteries.
The joint venture is currently awaiting approval from the Indian government. A majority stake in the proposed manufacturing venture will be owned by Mahindra.
This move comes as India is looking to ease restrictions on Chinese investments in non-sensitive sectors.
In 2020, the Indian government introduced stricter regulations requiring government approval for any investment from countries sharing a land border with India, including China. This move was aimed at addressing security concerns and reducing dependency on Chinese imports.
Recently, the government has started considering sector-specific approvals for Chinese investments. This means that investments in less sensitive sectors might be allowed, while critical sectors remain under strict scrutiny.
Approvals for Chinese investments are being given on a case-by-case basis. For example, Haier Appliances India received approval to invest ₹184 crore in AC component manufacturing after nearly two and a half years.
Shaanxi Automobile Group, also known as Shacman, is a prominent Chinese manufacturer of buses and trucks. Founded in 1968, the company is headquartered in Xi’an, Shaanxi Province. The Chinese auto group has a significant international footprint, with operations in over 140 countries. The company recently developed the X6000 800, the world’s most powerful truck, featuring a 16.6-liter engine.
Besides, Mahindra also has a notable presence in China, primarily through its acquisition of Jiangling Tractors Company. This strategic move has solidified Mahindra's position in the Chinese market for agricultural equipment. The company operates manufacturing facilities in China, which cater to both the domestic market and international exports.
Additionally, Mahindra (China) Tractor Co. Ltd. manufactures tractors for the growing Chinese market and exports them to the USA and other western nations. This presence allows Mahindra to meet the demand for tractors and agricultural equipment in China while also serving global markets.
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