With an abysmal sales performance, GM India is finding it challenging to retain its dealer partners. A good number of them are either scaling down their operations or surrendering the dealerships owing to viability issues. Over the last few months, the ailing American automaker’s dealership count in India has been reducing steadily from over 280 outlets to 223.
To give a perspective, GM India sold 19,299 units (cumulative sales) during April-September 2015 which is 33% less then what it managed during the same period previous year. On an average, each of 223 outlets sold only 15 units a month. Such a poor performance certainly threatens the sustainability of the business.
GM India would be focusing on making the existing dealer operations viable rather than plugging the void left by surrendered dealerships. The company claims that it has already increased the dealer margin to match the best in the industry.
In an attempt to turnaround its prospects in India, the automaker has announced fresh investment to the tune of INR 6,400 crore over the next few years. The strategy involves augmenting the Talegaon plant’s production, shuttering Halol plant and developing a family of new products based on an emerging market-specific platform.
GM India and its existing dealers are confident that a comprehensive product pipeline of 10 models in the next five years is expected to not only make the business sustainable but profitable as well.