One of the early entrants into the Indian market, General Motors Co. on Thursday said that it will cease its sales operations in India and focus on exports from the world's fastest growing passenger vehicle market. Auto companies have been pouring investment into the country, with $16 billion spent on plants and infrastructure over the past decade and a half, according to the Indian government.
Talegaon plant to be export hubThe Talegaon plant, which has a vehicle manufacturing capacity of 130,000 units and 160,000 engines per annum, will now be dedicated to catering to export market, upcoming export vehicle launches and exploring longer-term strategic options.
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.
Kaher Kazem, GM India president and managing director, said that the company's export business has tripled over the past year and that it will continue to leverage India's strong supply base.
"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".
"Our decision in India is an important milestone in strengthening the performance of our GM International operations and establishing GM as a more focused and disciplined company", Jacoby added.
Now, GM plans to stop selling Chevrolet brand vehicles by the end of the year and will produce vehicles only for export at its remaining factory in Talegaon. GM sold just 49,000 vehicles in India and South Africa combined past year.
South Africa informed employees and unions of the announcements this morning and will begin the formal consultation process with them immediately. At that time, around $1 billion Dollars was invested into both the Halol and Talegaon plants. The company has 150 dealers across India with 200 service outlets.
The company has confirmed that its Talegaon facility, which is in close proximity to Pune, will remain operational, but only as an export hub. It was reportedly in talks with China's SAIC Corp.to sell its plant in Halol, Gujarat-home state of Prime Minister Narendra Modi. Those vehicles built in Talagaon will be exclusively for export only to countries like Mexico and Central and South America, and the company will continue to work at its design and engineering center near Bangalore. Its first stint in India dates back to 1928 when it assembled cars, buses and trucks under the Chevrolet brand. A few officials in the know-how also said that there were multiple options to survive in the Indian market and this includes either getting products tailor-made for the market here or to stop implementing global standards for the products being made for the local market.