General Motors ends deal to sell India plant to China's Great Wall Motor

General Motors Co. has ended its attempt to sell a mothballed plant in India for about $300 million to China’s Great Wall Motor Co. after failing to get government approval to close the deal.

GM had twice extended the terms of the deal to close the sale as the two sides waited for a green light from the Indian government. When the June 30 deadline came and went, the Detroit automaker called off the sale and will instead explore other options, a spokesman said.

The collapse of the deal is the latest snag in GM’s exit from India. The automaker is also stuck in legal challenges from the labor union that represents more than 1,000 former workers at the factory, which claims the layoffs were illegal.

The Indian government has been scrutinizing business ties with China as relations between the two nations become increasingly strained. The economic rivals in the region have also squabbled over territory on India’s northern border, where troops on both sides clashed in 2020.

For GM, the sale of the plant would mark the end of its presence in India. The company canceled a planned $1 billion investment in the market in 2017 and stopped selling Chevrolet vehicles there as part of a broader retrenchment of the automaker’s global businesses. GM Chief Executive Officer Mary Barra also pulled the company out of Russia, Australia, Southeast Asia and South Africa.

Global automakers face a particular struggle to gain traction in India. Consumers favor cheap, compact cars such as those made by Hyundai Motor India Ltd. and Maruti Suzuki India Ltd., and the two companies control around 60% of the market. Toyota Motor Corp. has ruled out any expansion there, and motorcycle maker Harley-Davidson Inc. pulled out in 2020. Ford Motor Co. is also winding down its Indian operations.