General Motors To Stop Selling Cars In India By End Of 2017, But Not Pulling Out

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General Motors To Stop Selling Cars In India By End Of 2017, But Not Pulling Out

Posted on : Thursday 18th of May 2017

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General Motors Co will stop selling cars in India from the end of this year, drawing a line under two decades of battling in one of the world's most competitive markets. 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. This has affected the company's plans for India too as the sales haven't picked up in FY 2016-17. The company sold just 25823 units in the last fiscal year and its market share has dropped below 1 per cent in India. However, there is a bit of good news for the company as exports saw a sharp climb from 37,052 units in 2015-16 to 70,969 units in FY 16-17.  This is one reason why the company will still be using India as an export hub and we will see cars being made in India and shipped out to Mexico and Central and South American markets. The Talegaon plant has a capacity of 130,000 vehicles a year. 

"We are not giving up benefits India offers as a local cost manufacturing hub with an excellent supplier base which is extremely competitive," Stefan Jacoby, GM's chief of international operations, said in an interview.

GM it would no longer market its Chevrolet brand in India and this probably means that the Beat and its derivations will not be making its way to the Indian market. It will, however, keep operating its tech centre in Bengaluru and will refocus its India manufacturing operations by making one of its two assembly plants in India. It plans to sell the Halol plant in Gujarat to Chinese joint venture partner SAIC Motor Corp.

This decision does affect that current owners of Chevrolet cars as well and for those who are wondering what will happen to their cars, well the company says that " Chevrolet customers can rest assured the customer support center will remain open and all warranties and service agreements as well as ongoing service and parts requirements for all vehicles will continue to be honoured."

In fact the company also mentions that it is committed to maintain a service network across key locations with staff trained to take care of all the needs for repair and maintenance. It will also continue supporting its customers with service and spare parts as well as honouring warranties. The company also says that it will continue supporting its customers with service and spare parts. Vehicle warranties and service commitments made to customers will also be honoured and Chevrolet will continue to provide service centre support along with 24/7 contact center and roadside assistance support.

Dan Ammann, GM’s global president, said the restructuring actions for India announced on Thursday in essence cancels "most" of the plan GM unveiled in 2015 to invest $1 billion in India to deploy newly-designed vehicle architecture as part of a Global Emerging Market vehicle programme or GEM for short, and build a new line of low-cost vehicles in India.

The move is the latest blow to Prime Minister Narendra Modi's "Make in India initiative," aimed at making the country a global manufacturing powerhouse. To be successful in India, Jacoby said one option for GM was to "give up on implementing global platform and vehicle standards". The other was to team up with a local partner to run full operations as an automaker designing products and manufacturing and marketing products locally.

The company had planned a flurry of launches in India starring from the new-gen Beat followed by the Essentia subcompact sedan and finally the compact crossover Beat Activ - all of which were showcased at the 2016 Delhi Auto Expo. We've tried to reach GM India for a comment but as of now haven't received any information.

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