Chinese automaker Great Wall Motor has agreed to buy General Motors' (GM) car plant in Maharashtra, two sources aware of the matter said, setting in motion its plan to build cars in the country.
Great Wall, one of the biggest sellers of sports-utility vehicles (SUV) in China, is expected to pay about $250 million to $300 million to acquire the plant, one of the sources said.
The deal, which the sources said could be announced as early as Friday, will give a jumpstart to Great Wall's plans to build and sell cars in India and is likely to pave the way for GM's exit from manufacturing cars in the country.
GM in India did not immediately respond to a request for comment. Great Wall was not immediately reachable for comment.
Chinese automakers are accelerating plans to build cars in India to combat slowing sales at home and have been encouraged by the initial success of rival SAIC Motor in the country, sources have told Reuters.
While car sales in India are stuttering, the market is expected to become the world's third biggest by 2026, behind China and the United States, according to consultancy LMC Automotive.
Great Wall's move also comes at a time when global carmakers like Fiat Chrysler, Ford Motor and GM are scaling back in India after battling it out in one of the world's most competitive markets dominated by smaller, low-cost cars made by Maruti Suzuki and Hyundai Motor.
GM, which stopped selling cars in the domestic market from the end of 2017, has already sold one of its two plants to SAIC where the Chinese automaker builds cars under its British brand, MG Motor.
The American automaker continued to build small cars for export to countries like Mexico at its second plant in Talegaon in Maharashtra state which it has now agreed to sell.
Great Wall is expected to boost investment as it upgrades and modifies GM's plant to suit its needs and set up a base for its suppliers, said one of the sources, adding that the automaker expects to begin production within a year.
The SUV-maker is still finalising which model it plans to make in India first, including whether to kick off its launch with an electric SUV, Reuters has reported.
The plant is expected to have an annual production capacity of about 150,000-160,000 vehicles, the source said.