Chinese carmaker Great Wall Motors may set up plant at Pune

China's largest SUV maker, Great Wall Motors is likely to be the first carmaker from China to set up a plant on Indian soil. China's eighth-largest carmaker has zeroed in on Pune in Maharashtra for the plant and aims to start production by 2016.

GWM has also decided to launch its globally success Haval H5 model in India, two people with knowledge of the development said. The company was earlier considering Gujarat and Tamil Nadu to set up its plant, but chose Maharashtra due to a host of incentives offered by the state government.

"Great Wall has also taken into account Chinese government-owned Beiqi Foton Motor Company's decision to set up its commercial vehicles facility at Khed near Pune with a cumulative investment of Rs 1,676. The proximity factor is expected to help both the companies achieve back-end synergies," said a person having direct knowledge of the development.

The Chinese company has already sent a team of senior executives to India to workout a schedule to foray into the domestic market. The finer details of investment and capacity would be revealed in the next few months, the person added. Xi Liang Chen, Indian operation project manager of the Chinese automaker, declined to comment on the India strategy.

According to sources in the automobile industry, Great Wall has already initiated product clinics of the H5 SUV for the Indian market. The product would be showcased along with a few other models from the GWM stable in the February 2014 Auto Expo in New Delhi.

It has, however, ruled out any joint venture with any Indian partner unlike another Chinese carmaker SAIC that now holds 9% equity in its US car partner's local subsidiary General Motors India. Great Wall is likely to be the first Chinese auto company to establish a wholly owned subsidiary in India and introduce its own cars and SUVs.

Great Wall had earlier negotiated with the New Delhi-based International Car and Motor Limited (ICML), the manufacturer of utility vehicle Rhino and Sonalika tractor in India. The Chinese company was looking at utilising ICML's production facilities at Amb in Himachal Pradesh and its distribution network to market the H5 SUV in India, but failure in negotiations prompted it to go on its own.