General Motors To Stop Selling Cars In India


U.S.-based General Motors Co. announced on Thursday that it will stop selling its Chevrolet vehicles in India by year-end but the world’s third largest carmaker will continue to manufacture and export cars from the country.
The decision, which follows a comprehensive review of future product plans for GM India, is part of a series of actions taken by General Motors to address the performance of its operations worldwide, the company said in a statement.
“We explored many options, but determined the increased investment originally planned for India would not deliver the returns of other significant global opportunities. It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market…,” said Stefan Jacoby, executive vice-president of GM International.
Before the company announced its decision, two people familiar with the development had told BloombergQuint that the carmaker’s India head, Kaher Kazem, had visited the global headquarters to discuss the details.
General Motors, which entered India in 1995, is yet to find a foothold in the country with less than 1 percent market share. The company sells three hatchbacks – the entry-level Spark, the Beat and the SAIL, which also has a sedan variant.
It also has two multi-utility vehicles, the Enjoy and the Tavera. The Cruze sedan and the Trailblazer sports utility vehicle are its premium brands. However, only the Tavera managed to make a mark as far as sales are concerned.
General Motors, which was expected to launch a refurbished version of the Beat hatchback in July, has realised that continued sales in India would only increase the company’s losses, said one of the persons mentioned above.
The automaker will, however, continue offering after-sales services and support to existing customers.
As General Motors moved to consolidate Indian manufacturing at its Talegaon assembly plant, the company ceased manufacturing at Halol on April 28 this year. Negotiations continue on the asset sale at Halol, the statement said.
Decision to stop sales in India will impact 400 employees, or 8 percent of the total workforce, said Kazem in a media conference call after the announcement. The earlier statement quoted him as saying that the focus for the India manufacturing base at Talegaon will be exports, upcoming export vehicle launches and exploring longer-term strategic options.
“Exports will remain our focus going forward as we continue to leverage India’s strong supply base. We recently launched the new Chevrolet Beat hatchback for export to Mexico and Central and South American markets and will launch the Chevrolet Beat sedan later this year for those markets. We will support our affected customers, employees, dealers and suppliers,” Kazem said.
There is a possibility that French carmaker Peugeot could share the Talegaon plant once it returns to India, said the two people cited above.