India has just announced that they will stop local sales of their cars by the end of this year. GM exported 70,969 units from its Talegaon plant a year ago, thrice its sales in India.
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GM, which offers only its Chevrolet brand in the Indian market, has manufacturing bases in Maharashtra’s Talegaon and Gujarat’s Halol. The Detroit automaker announced on Thursday it plans to withdraw the $1 billion investment to build a low-priced vehicle family in India.
“It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market”, he added.
“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 global operations, said in an interview. GM is making a number of other changes to its global business as well.
“Light vehicle sales are in recovery mode since the negative consumer sentiment is subsiding with the easing cash situation, and buyers are slowly returning to the market in the aftermath of the government’s demonetization drive in the final months of 2016”, LMC Automotive said in a March report. The decision comes after unsuccessful attempts to enter into the competitive passenger vehicle market despite having its presence in India from the last two decades.
GM will award the responsibility for Chevrolet after-sales support to the approved Isuzu dealer network. Rumours are that SAIC, a Chinese carmaker, is negotiating terms with GM India to buy that facility.
GM also will cut an undisclosed number of staff at its GM International Operations headquarters in Singapore.
Toyota, Ford, Honda Motor and the Renault SA-Nissan Motor venture all have sizable sales operations in India, but all trail local companies in the race for volume.
In 2015, on a visit to India, GM CEO Mary Teresa Barra had announced plans to invest $1 billion in India to increase manufacturing operations and launch 10 locally produced models. “It is hard, but we will have to win the trust of customers”. While India was still a small market, General Motors had also chose to go down a route that possibly forecast their lack of sales success.
GMSA produces the Chevrolet Spark small auto, the Chevrolet half-ton bakkie and the Isuzu KB one-ton bakkie in Port Elizabeth.
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Isuzu Motors sales division senior executive officer Haruyasu Tanishige said on Thursday that he was unwilling to divulge the value of the sale agreement between Isuzu Motors and GM. However, struggling to make a turnaround in India, the company put on hold the plan and undertook a full review of its future product portfolio here. “From 2018, Isuzu dealers will provide aftersales and service support to Chevrolet and Opel customers until the details of our talks with PSA have been finalised”, the company.
