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Adieu Chevrolet: GM to stop selling cars in India, manufacturing units turned export-only

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Chevrolet is the only GM brand currently sold in India

Image Courtesy: twitter

The American multinational auto manufacturer General Motors (GM) has announced that it will stop selling and marketing cars in India by the end of 2017. The decision comes after unsuccessful attempts to enter into the competitive passenger vehicle market despite having its presence in India from the last two decades.

According to the latest figures, cars manufactured by General Motors has less than 1 percent of the total share in Indian passenger car market.

The latest move comes after the Detroit-based car makers envisaged a series of restructuring initiatives. The decision of GM Motors comes as a severe blow to the Indian government and especially for the Make in India campaign, which encourages auto makers to manufacture cars in India.

The popular GM brand in India, Chevrolet, which is the only GM brand currently sold in India, will no longer be marketed after this year. Strangely, the decision to pull out of the race comes at a time when market watchers predict a higher growth rate in the passenger car segment in India in the coming decade. According to Reuters, the Indian car market will surpass Japan in the next decade to become the third biggest market in the world.

According to Reuters, GM is not completely shutting down its India operations as they will continue functioning its tech center in Bangalore. The company will make the two manufacturing centers – in Telegaon and Mumbai – export only factories that build cars for the other markets.

Related: GM to invest $5 billion in India to develop Chevrolet vehicles

GM also plans to sell the Halol plant in the western Gujarat state to Chinese joint venture partner SAIC Motor Corp .

In an interview with Reuters, Stefan Jacoby, the Chief of International Operations, GM Motors said, “We are not giving up benefits India offers as a local cost manufacturing hub with an excellent supplier base which is extremely competitive.”

According to the figures of GM Motors, the production of car from its manufacturing units in India has doubled in the last fiscal year to 70,969 vehicles. These automobiles were exported to Mexico and Lain America.

The Talegaon plant of GM Motors has a capacity of manufacturing 130,000 vehicles a year.

Jacoby also added that the move to turn the Talegaon assembly into an export-only plant will not impact GM Korea and its position as an export hub. He said that it is because the vehicles manufactured there are shipped to North America, Southeast Asia, Australia and Pakistan.

Related: GM to invest $5 billion in India to develop Chevrolet vehicles

According to Dan Ammann, the Global President of GM, the decision on Thursday will cancel all the plans that the company revealed in 2015 including investing $1 billion to roll out new design architecture and build new vehicles especially for the Indian market.

The GM’s decision to back out from India is a severe blow to the Make in India initiative of Prime Minister Narendra Modi as it is aimed at making the country a global manufacturing powerhouse.