In the report filed from New Delhi, the news agency said the two business groups have agreed to set up a $3 billion joint venture to build a car manufacturing plant in India and are awaiting New Delhi's approval.
09 Aug 2024 | 1490 Views | By Sarthak Mahajan
Mahindra & Mahindra has clarified that 'there is no truth' in speculation that the group has sought government approval to set up an integrated car manufacturing faciltiy in Gujarat in association with China's Shaanxi Automobile Group.
The company did not get into the details, or clarify whether it was in ...
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Mahindra & Mahindra has clarified that 'there is no truth' in speculation that the group has sought government approval to set up an integrated car manufacturing faciltiy in Gujarat in association with China's Shaanxi Automobile Group.
The company did not get into the details, or clarify whether it was in any kind of talks with the Chinese company.
"As there has been some un-necessary speculation raised by the Reuter’s article, the Company on its own considers it necessary to clarify to the stock exchanges that the article is unfounded and there is no truth in the matter," Mahindra & Mahindra said.
The company's statement was in response to a news article published by Reuters.
Shaanxi Automobile Group is a Chinese bus and truck manufacturer with headquarters in Xi'an, Shaanxi, China.
In the report filed from New Delhi, the news agency said the two business groups have agreed to set up a $3 billion joint venture to build a car manufacturing plant in India and are awaiting New Delhi's approval.
A majority stake in the proposed manufacturing venture will be owned by Mahindra, the report said, quoting unnamed sources.
"The proposal includes building an export-oriented, integrated manufacture hub for assembled cars - known as completely built-up units - as well as engines and car batteries, the sources said," the Reuters report said.
It noted that Mahindra declined to comment on the news and that faxes and calls to Shaanxi's phone numbers listed on the company's website were not answered.
Investment by Chinese companies in India is considered a sensitive subject in India, given the strife-torn history between the two countries. The countries fought a full-scale wars sixty years ago, and have several unresolved territorial disputes that flare up occassionally.
China, for example, claims the whole of the Indian state of Arunachal Pradesh, and annexed parts of Laddakh to secure its access to Central Asia.
China also helps India's archrival Pakistan militarily and economically.
China has also been accused of unfairly subsidising local companies to help them undercut and eliminate competitors in other markets; and several countries, including the US and the EU, have imposed punitive tariffs on Chinese exports, including automobiles.
Chinese companies, therefore, see India as a viable market for their goods, and are keen to set up local manufacturing operations with a view to corner a large part of the market for themselves.
However, Government of India has blocked most such proposals, which has led some of them to explore the possibility of tying up with influential local business groups to ease their entry into the country.