General Motors India, yesterday confirmed that it will stop selling cars in the Indian market and Chevrolet Motors will cease domestic sales on December 31, 2017. The company has finally decided to pull its legs out from one of the world’s most competitive markets where it has been struggling for the past two decades and shares less than one percent market in passenger car segment. Instead, the auto giant will aim at improving business performance at the global level by targeting the key markets only.
It might come as a surprise to many, however, it really isn’t, considering the carmaker’s poor sales records of the recent years. The American auto giant had been planning this since last year when it decided not to go further in India with the new investments as the company wanted a full review of its future product lineup.
Read full story here - General Motors Halts The 6,700 Crore Investment in India
Not just in India, the American automaker also announced to wind up its operations from East and South Africa by selling it to Isuzu Motors and phasing out the Chevrolet brand from these markets as well.
Addressing the press, Stefan Jacoby, GM executive vice-president and president of GM International said, “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. 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.”
Earlier in this year, General Motors India stopped production at its Halol based facility in Gujarat on April 28, which has a capacity of manufacturing over 50,000 units annually. The GM is currently in talks with a Chinese firm SAIC, which is also its joint venture partner in China, to sell its Halol plant.
General Motors entered the Indian auto segment two decades ago, in 1996 and set up its first production plant in Halol, Gujarat, and initially started with the assembling of Opel Cars and on a later date, it shifted to Chevrolet brand. Recently, it was only manufacturing its best-selling MPV, Chevrolet Tavera.
Owning a large production facility in India, the carmaker will continue to manufacture cars from Talegaon based facility in Pune for export only, mainly to South America and Mexico. The plant has a production capacity of 1,60,000 units annually.
“In India, our exports have tripled over the past year, and this will remain our focus going forward,” said Stefan Jacoby, executive vice president and president, GM International.
The carmaker’s decision of exit from Indian market also abolishes its future plan of launching the updated 2017 Chevrolet Beat and a compact sedan, Essentia. The later was showcased at the 2016 Delhi Auto Expo and also spotted testing on the Indian roads.
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