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General Motors to cease domestic sales by end of 2017

May 18, 2017, 03:06 PM IST by CarWale Team
General Motors to cease domestic sales by end of 2017

General Motors made an announcement today about their plans to terminate their domestic sales in India by the end of this year. It was reported earlier that the American carmaker has shut down their Halol facility and shifted production to the Talegaon assembly plant. However, even after ceasing their Indian venture, the Talegaon facility will continue production, but it will become an export hub for the carmaker instead.

Despite the axing of the Indian venture, GM’s Technical Centre-India (GMTC-I) in Bengaluru will remain operational. The carmaker has given assurance that they will work closely with the affected customers and dealer network in their transition plan. The customer support center will remain open and all warranties and service agreements, as well as ongoing service and parts requirements for all vehicles, will continue to be honored.

GM’s Halol plant was in operation since 1996 but closed its doors on April 28, 2017. The negotiations to settle the asset sale at Halol continues. The decision to withdraw their operations comes after a consistent failure to hike up their sales in the Indian market. GM’s plans to conclude their Indian venture has been in discussion since June 2016, but it was officially confirmed today with the carmaker stating that “the company determined that its greatest opportunity in India to drive shareholder return rests on focusing on exports from India.” This announcement is a part of GM’s global disciplined allocation of capital and investment in its businesses around the world in order to generate stronger returns and drive shareholder value.

GM India’s export business has tripled over the past year, boasted the departing carmaker.  Taking leverage of India’s strong supply base, the new Chevrolet Beat will be exported to Mexico and Central and South American markets followed by a Beat sedan later this year for those markets. 

Stefan Jacoby, GM executive vice president and president of GM International, commenting on the decision, said, “We explored many options, but determined that the increased investment originally planned for India would not deliver the returns of other significant global opportunities. It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market. 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. 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”

Kaher Kazem, GM India president and managing director, said “The focus for the GM India manufacturing base at Talegaon will be export markets, upcoming export vehicle launches and exploring longer-term strategic options. We will support our affected customers, employees, dealers and suppliers. Chevrolet owners can be assured that we will continue to honor all warranties and provide comprehensive aftersales support.” 

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