General Motors to stop selling cars in India
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General Motors to stop selling cars in India

General Motors on Thursday said that it will focus on its growing vehicle export manufacturing operations and cease sales in the domestic market by the end of 2017.

The decision was announced as part of a series of restructuring actions from the Detroit automaker on Thursday, and marks a significant blow to India’s strategy of encouraging domestic manufacturing.

GM says it would no longer market its Chevrolet brand – its only brand of cars marketed in India – despite India’s promise as a market set to overtake Japan as the world’s third largest in the next decade.

Through the review, which began in June 2016, the company determined its greatest opportunity in India to drive shareholder return rests on focusing on exports from India.

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.”  This announcement is consistent with GM’s global disciplined allocation of capital and investment in its business around the world designed to generate stronger returns and drive shareholder value.

“Our decision in India is an important milestone in strengthening the performance of our GM International operations and establishing GM as a more focused and disciplined company,” said Jacoby.

As GM moved to consolidate Indian manufacturing at its Talegaon Assembly Plant, the company ceased manufacturing at its Halol Assembly Plant on April 28, 2017. Negotiations continue on the asset sale at Halol.

Kaher Kazem, GM India president and managing director, said the focus for the GM India manufacturing base at Talegaon will be export markets, upcoming export vehicle launches and exploring longer-term strategic options.

“GM India’s export business has tripled over the past year,” Kazem said. “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. “Chevrolet owners can be assured that we will continue to honor all warranties and provide comprehensive aftersales support.”

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