General Motors India has officially announced that it will focus on its growing vehicle export manufacturing operations and cease sales in the domestic market by the end of 2017. GM India also said that it has informed its employees of the decision.
The decision, which follows a review of future product plans for GM India, is part of a series of actions taken by General Motors to address the performance of its operations worldwide. Through the review, which began in June 2016, the company determined its opportunity in India to drive shareholder return rests on focusing on exports from India.
As GM moved to consolidate Indian manufacturing at its Talegaon Assembly Plant, the company ceased manufacturing at its Halol Assembly Plant on April 28, 2017. Negotiations continue on the asset sale at Halol. This announcement is consistent with GM’s global allocation of capital and investment in its business around the world designed to generate stronger returns and drive shareholder value.
The company will work closely with affected customers and dealers on a 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. 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.
Stefan Jacoby, Executive Vice-President and President, GM International, said that they explored many options, but determined the increased investment originally planned for India would not deliver the returns of other significant global opportunities. It would also not help them 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 their global strategy and deliver appropriate returns for their shareholders. Their decision in India is an important milestone in strengthening the performance of their GM International operations and establishing GM as a more focused and disciplined company.
“GM India’s export business has tripled over the past year. Exports will remain our focus going forward as we continue to leverage India’s strong supply base. We recently launched the new Chevrolet Beat hatchback for export to Mexico and Central and South American markets and will launch the Chevrolet Beat sedan later this year for those markets. 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 after-sales support.” Kazem said.