Hyundai Motor India (HMIL) has signed an asset purchase agreement (APA) for the acquisition and assignment of identified assets related to General Motors India (GMI)’s Talegaon plant in Maharashtra.

The APA covers the acquisition and assignment of land and buildings, as well as certain machinery and manufacturing equipment in the plant, HMIL said in a statement on Wednesday.

The acquisition and assignment is subject to fulfilment of certain conditions precedent, and receipt of regulatory approvals from the relevant government authorities and stakeholders, it said.

“This year is a significant milestone for Hyundai Motor India, as we celebrate 27 years of activity in the market. Demonstrating our dedication to India, earlier this year,to expand capacity and establish an electric vehicle ecosystem ... we intend to create an advanced manufacturing centre for cars Made-in-India in Talegaon, Maharashtra,” Unsoo Kim, Managing Director and Chief Executive Officer, HMIL, said.

The manufacturing operations are scheduled to begin in 2025, he said.

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India is one of the world’s most promising automotive markets, with a population of more than 1.4 billion as of 2023. The country is currently considered one of the world’s top three automobile markets in terms of sales, and aims to increase its electric vehicle sales to 30 per cent of total car sales by 2030.

Hyundai Motor sold 5,52,511 vehicles in India last year, to rank second with a 14.5 per cent share of the market. HMIL has sold 3,46,711 vehicles this year (as of last month), with a 14.6 per cent share in the domestic market. The company is pushing to strengthen its production capacity to respond to demand expansion in the Indian automobile market.

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Currently, GMI’s Talegaon plant has an annual production capacity of 1.30 lakh units. Since HMIL already has enhanced its production capacity from 7.50 lakh units to 8.20 lakh units in the first half of this year, the capacity augmentation of the GMI plant will lay the foundation for HMIL to produce around one million units a year, the company said.

Leveraging the expanded capacity, HMIL will review plans to launch additional electric vehicle models in the Indian market, manufactured at its Sriperumbudur plant, thus accelerating India’s electrification goals. The company expects this agreement to help vitalise its business as well as strengthen its position in the Indian automotive industry, it added.