GM announces initial investment of $1 billion.
By Raif Karerat
WASHINGTON, DC: General Motors, the world’s third largest automaker, announced Wednesday that it will invest $1 billion over the next few years to overhaul its Indian operations and turn the country into a global export hub for the company.
“This is the beginning of a new GM in India. There will be many changes in the way we operate,” said Mary Barra, CEO of General Motors, according to The Hindustan Times. “Clearly with some of the challenges we have had on quality and some of the products that we had, we need to earn trust of our customers. We have changed our processes [and] benchmarked with some other industries because we want to make zero defect. Customers should have vehicles that have no issues. We will be more transparent and decisive.”
According to Reuters, the significant injection of capital is part of GM’s plan to invest $5 billion over several years to develop a global family of Chevrolet vehicles with Shanghai Automotive Industry Corp (SAIC), the state-owned Chinese automaker that is GM’s primary partner in China.
India’s automobile market has been sluggish for the past few years, with annual sales of less than 3 million cars. However, by 2020 analysts expect India to become the world’s third-largest passenger vehicle market after China and the United States.
General Motors has been engulfed in a number of controversies in India. In 2013, it was tapped by the government for a corporate fraud when specifications in its utility vehicle, Tavera, were doctored to meet emission norms. It has also been found to be sluggish in recalling vehicles on time to fix defects.
GM will launch 10 new domestically manufactured vehicles in India over the next five years in a push to double its market share in the country by 2020, Stefan Jacoby, GM’s chief of international operations, told a news conference Wednesday. GM sold 56,700 vehicles in India in 2014 and had a market share of 1.8 percent.