Chevrolet Beat front three quarters

General Motors sees growth potential in India, aims 5% market share within the decade

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Detroit-giant General Motors is planning on invading India very soon. Well, not exactly, but the carmaker does have some plans and the subcontinent seems to be at its crux of future operations. GM hasn’t been doing very well in India and despite its 18 year presence in the country, has been losing money hand over fist. To counter the losses, the carmaker has set up some new product launches, the Chevrolet Trailblazer SUV being one of the first. This is to be followed by the Chevrolet Spin MPV some time later.

Chevrolet Trailblazer

The 7-seater body-on-frame SUV will be launched in H2 of 2015.

As part of its revival plan, GM will be making India a part of its global manufacturing and export hub. This is being planned to reduce the workload on its South Korean business, which has recently seen rising labour costs. According to General Motors, India will become the world’s third largest car market by the turn of this decade, thus leaving behind Japan. It projects the country’s annual sales to hit 8 million units by the year 2025 and hopes to gain 5% market share of that over the same period. India currently sells just over 3 million units every year.

Chevrolet Beat Export from India

Beat – the hiptown boy from Chevrolet. It’s manufactured in the Talegaon plant.

General Motors is also set to introduce some subcompact cars in India, which will offer more interior room and functionality than rivals. Stefan Jacoby, chief of international operations at General Motors said, “India may be the last big white sheet of paper in the automotive industry. We’re pretty optimistic. We see growth potential in India, and believe there’s a good opportunity for the Chevrolet brand to take share in this market. There’s more prosperity and buying power. Vehicles selling for $5,000-$8,000 will more and more disappear in India.” Seems like 57 year-old Jacoby is mighty impressed by our new Prime Minister Narendra Modi and even said, “India has gained back confidence.”

Chevrolet Spin (2)

The Spin MPV will be making its way to India after the Trailblazer.

General Motors, under the guidance of Jacoby, has been kept busy restructuring their global manufacturing operations and even shut plants in Australia and Indonesia. GM is also thinning its Thailand operations, all in the relentless pursuit of profits. Profits that have evaded the Detroit giant for a while, now. Thanks to lower labour costs, India will replace much of GM’s South Korean operations, as far as an Asian export hub is concerned. In 2014, General Motors’ South Korean facilities shifted 630,000 units. That’s just 75% utilisation of the facilities’ capacity, which isn’t going to squeeze any profits for the carmaker.

General Motors India Launches New Chevrolet SAIL Sedan & Hatchback (1)

The Chevrolet Sail range of cars were originally meant for the Chinese market.

General Motors wants to sell 400,000 units per year in India by 2025. That’s an optimistic leap, since the carmaker only managed to shift 57,600 units (1.8% market share) in the country in 2014. Between the start of the year to the month of March, GM has lost a staggering $604 million on its India operations. The carmaker currently has a production capacity of 282,000 units per year from both of its Indian plants – namely, Halol and Talegaon. If it even hopes to sell 400,000 cars per year by 2025, GM needs to increase this production capacity to 570,000 units per annum. General Motors is quite right about their prediction of growth in our market, but only time will tell how well the carmaker will utilise that knowledge.

Source – ET Auto

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