Chinese vehicle producer SAIC is reportedly considering a move to purchase a GM India plant to start manufacturing in India. Reports in India suggest that the company plans to buy GM's Gujarat factory.

SAIC, which partners GM in China and holds a single-digit percentage share in the US company's India operations, is conducting a due-diligence of the Halol factory that GM will vacate by July as it focuses on operations through its plant at Talegaon in Maharashtra, reports say.

The Times of India reported that negotiations were at an advanced stage.

If the deal goes ahead, SAIC will be the first major Chinese automotive OEM to set up manufacturing operations in India, a market seen by many analysts as having very good long-term growth potential.

The Economic Times reported that SAIC is expected to begin its India operations by contract-manufacturing GM India's models that are already being made at Halol. GM makes 'Cruze' sedan and 'Tavera' and 'Enjoy' MPVs at the factory.

The two companies are also said to be involving the Gujarat government in discussions, as fiscal incentives are included.