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Changan automobile drops its entry plan in India as hurdles grow

Changan Automobile, a Chinese automaker, has suspended its plans to enter India as relations between the two major Asian neighbors deteriorated after the People's Liberation Army clashed with Indian forces in East Ladakh.

Since then, India has responded by canceling Chinese apps, subjecting Chinese companies to more scrutiny, and more scrutiny of foreign direct investment from its northe
neighbor.

Changan Automobile had plans to invest more than $ 500 million in India and has already engaged with a consulting firm EY for plans to enter India. The company had already researched the Greenfield facility in Tamil Nadu, Gujarat, and even Telangana and had even hired a local distribution partner.

Last month, Changan Automobile closed his office in India, prematurely terminating his long-term lease contract, and his only Indian advisor has also resigned, according to several people familiar with him. Interestingly, this was Changan's third attempt in the past five years to enter the Indian market. A few years ago, it explored a manufacturing alliance with its global partner Ford in India, but the talks were unsuccessful.

Sure, it's not just Changan Automobile, but all of the Great Wall Motors ex-pat visas that have expired had to retu
to China even as he retained his hope of entering India. In addition to awaiting the green light for the center on the implementation plan in India, Great Wall Motors faces an additional hurdle in overcoming a dispute between GM and its trade union over the plant shutdown.

These recent developments put a planned investment of $ 3-4 billion by the Chinese automaker in India at risk. In addition to investing in Greenfield facilities, many of them have also been exploring contract manufacturing deals with companies such as the Volkswagen Group, Ford India, Mahindra, and Mahindra.

The epidemic at the end of a bad year for cars has pushed the Indian market into 2010-2011 sales and there is significant idle manufacturing capacity in the country. Tight controls over Chinese investment could also prevent various alliances and partnerships from exploring. Chery Automobile is in talks with Tata Motors to launch in India, M G Motor has explored a manufacturing alliance contract with Volkswagen and Ford, and Changan Automobile has also been open to contract manufacturing opportunities.

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