Author Aditi Shah and Neha Arora
New Delhi (Reuters) -The Chinese Saic engine will reduce its 49 percent. The Indian joint venture package will suspend further investment. Five people said the last sign, as political tension between Asian neighbors, spills into business.
The SAIC decision makes after India in 2020 Has set restrictions on their neighbors’ investment – a step widely regarded as for China. The friction between the two nations intensified after the border of the same year.
To try to grow in India, Saic, one of China’s largest state -owned car companies, chose to associate with the local conglomerate JSW group.
Indian and Chinese leaders met last month to facilitate relationships by increasing the hope of improving business relationships. Since then, there have been little progress signs, such as Indian car firms are still waiting for China’s approval to buy rare land from China.
Linking with JSW was used to inject funds into the largest car manufacturer’s manufacturer’s manufacturer’s base outside China and also facilitate regulatory obstacles. However, this was not delivered, said one of the people. All five people who were familiar with the matter refused to determine because they were not authorized to speak publicly.
Saic does not leave India, but wants to significantly emphasize its share package JSW MG Motor and will continue to provide technology and products to the company, the second person said.
JSW offered to acquire most of the SAIC shares to become the biggest shareholder, but both parties disagree on the assessment of the Chinese car manufacturer at a higher price, the person said, adding that the negotiations are ongoing.
Saic, JSW and JSW MG Motor did not respond to the requests to comment.
Stuck investment offers
The friction between two companies is not all about politics.
JSW seems to have and has also been a partner to negotiate with the Chinese firm Chery Automobile to park cars in India, three of the people said.
JSW has long wanted to sell cars to its brand, and conversations have advanced to Chery for technology, not property.
Chery did not respond to the request to comment.
India, the third largest car market in the world, is increasingly describing itself as an industrial production center. The Japanese Suzuki Motor, the dominant Indian player, plans to invest about $ 8 billion in the next five to six years and turn the country into its global production base for electric cars.
SAIC 2019 Intried India by its MG Motor brand with plans to invest more than $ 650 million. He took over the former General Motors factory in the state of West Gujarat, with an annual production capacity of about 120,000 cars.