General Motors to cease sales operations in India by 2017
19 May, 2017, 04:01
Indian arm of American auto maker General Motors is going to focus on its growing vehicle export manufacturing operations and cease sales in the country by the end of 2017, informed the company in an official statement released on May 18. In 2015, GM had announced plans to invest $1 billion to enhance manufacturing operations and roll out 10 locally produced models in India while deciding to stop production at its first plant at Halol in Gujarat.
"As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company", said company's chairman and chief executive Mary Barra in a statement.
The Detroit automaker said on Thursday it will take a $500 million charge in the second quarter to restructure operations in India, Africa and Singapore.
General Motors said it will stop selling vehicles in India, the latest retrenching by the USA auto maker as it redirects investment in future technology and bolsters its presence in more-lucrative markets where it has a leadership position.
GM entered the Indian market a century ago, selling Chevrolets there in 1918 and opening a factory near Bombay in 1928. Get twice-daily updates on what the St. Louis business community is talking about. According to Kaher Kazem, president and MD, GM India, "GM India's export business has tripled over the past year".
The decision is a culmination of the company's comprehensive future product plans, and the misalignment of its original investment plans and the market opportunity here. There simply was no way this poor management by GM India could've gone forever and finally the sales have been called off. It will engage with them to support existing customers and supply spare parts besides honouring product warranties, Kazem said. In 2016, GM delivered more than 3.8 million vehicles in China.
Jacoby said the move to turn the Talegaon assembly into an export-only plant will not impact GM Korea and its position as an export hub. Now, GM will stop selling Chevys in India entirely by the end of the year.
IHS Markit principal analyst Anil Sharma reckons that GM did not experiment enough in small vehicles, the segment that works best for the Indian market.
Ritch Schaafsma, GM International Vice President would not concede to it being a disinvestment in South Africa, but rather allocating future investments in Port Elizabeth to Isuzu. It sells vehicles under the Chevrolet brand in India.
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