GM to stop selling vehicles in India, focus now on exports
The Dollar Business Bureau
American auto manufacturer General Motors (GM) on Thursday said that it has decided to end selling of vehicles in India because there was no improvement in its fortunes in the country after a struggle of more than two decades for making a mark in the Indian market.
The auto major will now only emphasise on exporting vehicles from its plant at Talegaon in Pune (Maharashtra), after the production was stopped last month at its first plant at Halol in the state of Gujarat.
The decision, to stop selling vehicles in India, follows a comprehensive assessment of future plans for products by GM India and is a part of several actions taken by the company in order to address its operations performance globally, it said in a statement.
The company has also left four other foreign markets, including the Europe and Russia.
Stefan Jacoby, Executive Vice President and President of GM International, said after exploring several options, General Motors determined that the originally planned increased investment for India would not bring in the required returns of other important world opportunities.
“It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market,” he added.
In India, sales of GM were down almost 21% in the fiscal of 2016-17 to 25,823 units. It sells vehicles under the Chevrolet brand in India.
However, the company’s production increased around 16% to 83,368 units, the bulk of which was exported.
In 2015, the company had announced its plan for investing $1 billion to augment its manufacturing operations in India and to launch 10 locally manufactured models in the domestic market whereas deciding to end production at the first plant at Halol.
The Halol plant had a total yearly capacity of manufacturing 1.1 lakh units and was earlier planned to be closed by middle of 2016.
The company has been in discussions with SAIC Motor Corporation of China for selling the plant.
