General Motors to stop selling vehicles in India, focus on exports

GM to stop selling cars in India but not pulling out

GM India informed employees of the decision today.

In addition to stopping sales in India, where the company sold just 29,000 vehicles past year, GM also said it is selling its plant and remaining 30% interest in a manufacturing operation in South Africa to joint-venture partner Isuzu.

But GM has struggled to make headway over more than two decades in India, where its Chevrolet brand has captured just 1% of the market.

The manufacturing plant in Struandale will be sold to Isuzu along with GM's 30% stake in the Isuzu Truck SOuth Africa joint venture.

The situation is similar in South Africa as Jacoby said "We determined that continued or increased investment in manufacturing in South Africa would not provide GM the expected returns of other global investment opportunities".

GM said it will work closely with affected customers and dealers. GM's Chevrolet brand will be phased out of both markets by the end of 2017, the company said.

Jacoby said the move to turn the Talegaon assembly into an export-only plant will not impact GM Korea and its position as an export hub. Talegaon production capacity now stands at around 1.3 lakh vehicles a year which can be further expanded to 1.7 lakh units.

General Motors will maintain its Talegaon, India plant, but cars produced at the plant will be made exclusively for the export market.

Numsa said it is concerned that GM has already indicated that it might retrench workers and that it intends to issue section 198 and 197 notices.

GM's exports from India - mainly to Mexico and Latin America - almost doubled to 70,969 vehicles during the fiscal ended March 31.

The decision follows a comprehensive review of future product plans for GM India and is part of a series of actions taken by General Motors to address the performance of its operations worldwide, the company said in a statement.

The company said it will "phase out manufacturing and sales of Chevrolet vehicles subject to regulatory approvals".

GM India exports the left-hand drive Beat to countries including Mexico, Chile, Peru, Central American and Caribbean Countries (CAC), Uruguay and Argentina. China's auto market, the world's largest, grew to 28 million vehicles in 2016 and will likely climb 5 percent in 2017 to 29.4 million vehicles, according to the China Association of Automobile Manufacturers.

Last year, Ford Motor Co shelved plans to produce a new compact vehicle family designed mainly for emerging markets. In June past year, GM came to the conclusion that its Indian operations are best utilised for exports to other countries. GM would also withdraw sales of the Chevrolet brand from the market.

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