General Motors has announced plans to exit the Indian Market by year end, as it will stop selling cars under its Chevrolet brand in India. Currently, Chevrolet is the only brand GM has in India.
The decision has been made as a part of a series of a restructuring plan by General Motors on Thursday. And while it is indeed sad news for the Indian automobile market, GM stands to lose a growing market for its cars.
General Motors plans to keep its export-only factory at Talegaon operational, which it uses to manufacture cars for the Latin America and Mexico. Last year, it had manufactured 70,969 vehicles at the plant, which has a maximum capacity to produce 130,000 vehicles in a year.
It plans to sell its Halol plant in Gujarat to Chinese joint venture partner SAIC Motor Corp..
Last year, GM’s total share in the Indian Car Market fell to just 1%, as it managed to sell only 25,823 vehicles in the entire year, even though Indian Automobile Market grew by 9% to touch a volume of 3 million vehicles!
GM’s failure to come up with a low-cost yet feature-rich vehicle and the high cost of maintaining Chevrolet cars are being given as the primary reasons for the poor performance of the company in India.
Stefan Jacoby, GM’s chief of international operations, said that in order for GM India to succeed, one option was to “give up on implementing global platform and vehicle standards” or team up with a local partner to run full operations. “We have made the decision that these two options are not for us,” Jacoby said.
Furthermore, GM has put up the following message on its website for its existing customers, who will no doubt be worried about the servicing and value of their Chevrolet cars.
“General Motors recently announced the decision to withdraw Chevrolet from the domestic car market in India at the end of this calendar year. The sale of Chevrolet vehicles will end on 31 December 2017.
Chevrolet India is committed to maintain a service network across key locations in India with staff trained to take care of all the needs of your Chevrolet for maintenance and repair. We will continue to honour your original Chevrolet vehicle warranty as well as supporting you through Chevrolet’s Roadside Assistance. We will continue to provide spare parts for your Chevrolet to support maintenance and repair of your vehicle. For any questions regarding support for your Chevrolet, please contact your nearest Chevrolet Service Centre or our Customer Assistance Team at 1-800-3000-8080 or email [email protected]”
One thing is for sure, the value of Chevrolet cars will take a nose dive and likely follow what happened when Daewoo left India. Ironically, Daewoo Motors was bought by General Motors and the first car they launched in India was none other than the Daewoo Matiz aka the Chevy Spark!