Published: Thu, May 18, 2017
Medicine | By Megan Pierce

GM to stop selling vehicles in India, focus on exports

GM to stop selling vehicles in India, focus on exports

One of the early entrants into the Indian market, General Motors Co. on Thursday said that it will cease its sales operations in India and focus on exports from the world's fastest growing passenger vehicle market.

Isuzu will take over GM's commercial-vehicle factory in the coastal city of Port Elizabeth and will also buy the USA automaker's 30 percent share of a truck manufacturing joint venture, GM said in a statement on Thursday. The decision will impact around 400 employees of GM India engaged in domestic sales and after sales activities. This decision, as per the company, is part of a series of actions taken to re-evaluate business performance of its operations globally.

It has also exited from four other worldwide markets, including Russian Federation and Europe.

"GM India's export business has tripled over the past year", Kazem said. "It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market", he said in a statement. GM said it will withdraw its global Chevrolet brand from India and South Africa by the end of the year. Its production, however, grew about 16 per cent to 83,368 units most of which were exported. GM's International Operations, aside from China, have been a drag on the company's earnings for several years.

"Difficult as it has been to reach this decision, it is the right outcome to support our global strategy and deliver appropriate returns for our shareholders, Jacoby said".

Various speculations and rumours doing rounds on the internet have already indicated that General Motors might quit the Indian market in the near future.

In the statement, the company said that the move is aimed at developing the company.

GM sales in India were down almost 21 per cent in 2016-17 to 25,823 units.

Despite being an early entrant, GM has struggled to boost its sales and market share in India in part because it has failed to launch low-priced yet feature-rich vehicles that Indian buyers prefer, according to analysts.

General Motors India will now operate all its manufacturing operations from its second plant at Talegaon in Maharashtra.

GM said the actions will save it $100 million annually.

"From 2018‚ Isuzu dealers will provide aftersales and service support to Chevrolet and Opel customers until the details of our discussions with PSA have been finalised".

Existing Chevrolet customers will continue to be supported in the market, the company said. GM India, which produces the left-hand-drive Chevrolet Beat at its Talegaon, Pune plant, exports the auto to many markets including Mexico, Chile, Peru, Central American and Caribbean countries, Uruguay and Argentina.

"Exports will remain our focus going forward as we continue to leverage India s strong supply base", he said, adding that recently new Chevrolet Beat hatchback was exported to Mexico and Central and South American markets and will launch Chevrolet Beat sedan later this year for those markets.

Like this: