Earlier, GM India announced an investment of USD 1 billion to transform its ailing operations. The investment plan included a complete overhaul of the product portfolio with a new global emerging market platform as a primary element. However, the American automaker announced today that they are shutting down India operations.
General Motors never made its mark in the Indian auto sector – in spite of being one of the first foreign car brand to arrive in India. The company has deferred all future investments within the country.
The news comes as a surprise, because it basically means that a prominent global automaker like GM is willing to afford to stay indifferent to India, which is touted to become the third largest auto market in the world by 2020.
Back at the 2014 and 2016 Auto Expo, GM India had showcased some promising new products. This includes the Chevrolet Adra compact SUV, Chevrolet Essentia compact sedan, and the new Chevrolet Beat. With today’s announcement, it is the end of the line for not only these products, but also for the products which are being sold in India currently.
Accumulating losses, plummeting sales and uncertainty over government policies appear to have prompted GM India to take stock of the situation and review its future strategy.
General Motors started scaling down Indian operations last year. They first consolidated manufacturing processes at its Talegaon plant, shut down Halol plant in Gujarat, and so on.
In a statement to the media, 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. 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.”
What happens to GM India car owners?
Kaher Kazem, GM India president and managing director, said – “GM India’s export business has tripled over the past year. 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. Chevrolet owners can be assured that we will continue to honor all warranties and provide comprehensive aftersales support.”
The company will work closely with affected customers and dealers on a transition plan. 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 honored, confirmed GM India.
GM India customers can call 1-800-3000-8080, email us at email@example.com or visit chevrolet.co.in.
The GM Technical Centre-India (GMTC-I) in Bengaluru performs global work for GM. This work is not impacted by this announcement.