A subsidiary of China's top automaker SAIC Motor Corp plans to acquire General Motors (GM) manufacturing assets in India, a filing with the Indian competition watchdog showed on Friday.
The assets, which would give the Chinese car giant a significant foothold in India's car market, will be acquired through an Indian subsidiary of SAIC that has to be incorporate, according to the filing with the Competition Commission of India.
As part of a side deal, General Motors also unveiled plans to buy out SAIC's 9.2 percent stake in SAIC General Motors Investment, which is a joint venture it created with the Chinese automaker in 2009 to expand its presence in emerging markets like India, according to a separate filing.
In an email to Reuters, GM said its negotiations with SAIC on the sale of its Halol plant in the western Indian state of Gujarat were progressing well and that the two parties are working to secure necessary approvals.
"We'll share any progress at the appropriate time," GM said.
SAIC declined to comment on the deal.
In an earlier report from Reuters in April last year, SAIC was in talks to buy GM's Gujarat plant and had been evaluating car models to introduce in India.
GM said in 2015 that it planned to shutter one of its two plants in India by mid-2016 and consolidate operations at one location.
The Detroit-based conglomerate's Halol plant has a manufacturing capacity of 110,000 vehicles per year. GM also runs a plant in Talegaon in the western state of Maharashtra that can manufacture up to 170,000 vehicles a year.
Several foreign carmakers such as GM, Volkswagen, and Ford have struggled to boost sales in India, which is expected to be the world's third-largest car market by 2020, and are now pushing exports from the country to utilize idle manufacturing capacity.
Poor sales and a regulatory crackdown on diesel-powered vehicles have forced GM to reevaluate its future in India.
In July, GM said it has put a hold on its planned $1 billion investment in India and cancelled plans to bring a new car platform to the country that would help it better compete against its top competitor in the country, Maruti Suzuki.
Between April and November, GM's India sales dropped sharply by 19 percent to 17,868 vehicles, while total passenger vehicle sales in the country grew by 10 percent over the same period, according to industry data.