You should credit them for trying. As one of the first foreign multinationals to invest in the Indian market, General Motors has been persevering for over 20 years.
This month, however, it has finally pulled the plug, announcing that it will stop making cars in India for the Indian market by the end of this year. That doesn’t mean it will cease all manufacturing. Although the firm has already stopped its production in Gujarat, it will continue with its manufacturing foundry at Talegoaon in Maharashtra, making parts and cars for export to the Asian and South American markets.
As part of a wider re-structuring aimed at improving profitability, the BBC reported, GM has put a $1 billion investment plan for India on hold, while also pulling back in South and East Africa. The firm plans to sell a 57.7% shareholding and grant management control to Isuzu in its East African operations, as well as stop selling cars in South Africa and sell its Struandale plant there to the Japanese firm in a re-structuring aimed at creating savings of $100 million per annum.
To be fair, minor successes aside, GM has struggled in India and failed to make much impact on a market originally dominated by domestic brands but latterly by Japanese and Korean firms. Even after more than 20 years, GM’s Chevrolet brand only has 1% of the market.
Commenting on the earlier plan to invest $1 billion in the market to develop its product range in what is forecast to become the world’s third largest car market, GM’s International president Stefan Jacoby is quoted as saying, “We determined that the increased investment required for an extensive and flexible product portfolio would not deliver a leadership position or long-term profitability in the domestic market.” (more…)