GM to stop selling vehicles in India, focus on exports

Besides its light commercial vehicle manufacturing operations in Struandale‚ Port Elizabeth‚ which it was selling to Isuzu‚ the USA auto maker meant to cease its South African operations by the end of 2017‚ GM said on its website.

Despite being an early entrant, GM has struggled to boost its sales and market share in India in part because it has failed to launch low-priced yet feature-rich vehicles that Indian buyers prefer, according to analysts.

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

In South Africa, GM said Isuzu will buy GM's plant in Struandale, its 30 percent shareholding in the Isuzu Truck South Africa joint venture and a GM distribution center.

While GM will continue building products in India to sell in other countries, its decision to pull out of the market in the world's second-most populous country reflects a wider recalculation of where it should be laying bets.

"It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market", he added.

"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, Jacoby said".

A few weeks ago, GM India had announced that it has shut down its Halol plant and will most likely be selling it to its Chinese partner, SAIC.

The announcement of its exit from SA and India on Thursday followed a March 5 announcement that GM was exiting Europe by selling its Opel brand to the French maker of Peugeot and Citroën‚ PSA for $2.3bn. Across affected markets, GM is working with employees, their union representatives and local authorities to provide transition support. At that time, around $1 billion United States dollars was invested into both the Halol and Talegaon plants.

The company however did not give a timeline till when it will end it after sales service to customers.

"In India, our exports have tripled over the past year, and this will remain our focus going forward", GM International President Stefan Jacoby said in a statement.

"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", Kazem said.

The company, in a statement issued here, said that it will now focus on exporting vehicles from its manufacturing plant at Talegoaon in Maharashtra after it stopped production at its first plant at Halol in Gujarat last month.

Senior officials from General Motors have arrived in India from Detroit and Singapore. GM said it has a weak position in that market, selling around 20,000 vehicles there past year. However, the USA auto major became majority partner by buying 43 per cent from SAIC in 2012.

  • Joanne Flowers