American auto major, General Motors will stop selling Chevrolet vehicles in the India by the end of 2017. But, the after-sales service commitments for the existing buyers will continue to be honored. However, according to GM India’s officials, the company’s manufacturing and assembly facility at Talegaon, Maharastra will continue its operations as an “export hub” for Mexico and LATAM markets. The company had last year exported over 70,000 units, which constituted around 90% of their total business from India. The company would like to further increase production from the facility. The decision which has been announced on Thursday, is part of a larger restructuring plan that will see the American carmaker exit South Africa and concentrate on its operations in Brazil and China.
“Every OVM has a different strategy to run the business and has different footprints. Ours is a decision in-line with global brand strategy. It’s all based on the capitalization of funds and we decided to keep the export only structure.” – Kaher Kazam, President, and CEO, GM India.
The company saw its sales dwindling from a peak of over one lakh units during 2011-12 to a low 25,823 units in India for FY16-17, down 21% year-on-year. Even the parent General Motors had to withdraw its $1 billion investment proposal in India as was announced by its CEO in 2015 owing to the falling domestic sales. The company has been selling cars such as Beat, Trailblazer among others under Chevrolet brand only in India.
The current decision to stop India-centric sales will lead to 400 people job losses, mainly from the Delhi centre where the company has its operations setup. As per the latest standing, GM has 5,000 employees in India, including operations at GM Technical Centre in Bengaluru (which will continue to function) and its Talegaon plant in Maharashtra. It has 150 dealerships and 200 service centres. On average, one car distributor employs at least 50 people to sell and service cars.
Last month, GM has closed down its Halol Assembly Plant in Gujarat State. Company’s Chinese partner SAIC Motor Corp had decided to step into Halol but asked for all local labour disputes need to be settled first.
Cover image attribute: media.gm.com
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