General Motors shelves billion dollar investment plan for India
Facing stiff competition in India, General Motors has put on hold its billion dollar investments in India as the auto maker seeks to review its future operations in the country
The company, which had in 2015 announced plans to invest USD 1 billion to enhance manufacturing operations and roll out 10 locally produced models, has not put any timeline for lifting freeze on investments on the new products.
"...given the shift in customer preferences in India, we are conducting a full review of our future product portfolio and have put on hold future investment in our all-new vehicle family for the market until we firm up our product portfolio plan," a General Motors official spokesperson told PTI.
While announcing USD 1 billion investment for India in 2015, General Motors CEO Mary Barra had said the company would strengthen business in India, China, Mexico and Brazil through the development of a new family of vehicles known as Global Emerging Markets (GEM) platform.
Although SUV Trailblazer has been launched for the Indian market, multi-purpose vehicle Spin, which is among the planned new models, is yet to be launched here.
Currently, the company's arm General Motors India sells a range of vehicles, including hatchback Beat, sedan Cruze and multi-purpose vehicle Enjoy, among others.
The company, whose Indian arm has managed to cut its net loss to Rs 1,003.39 crore in 2014-15 from Rs 3,812.46 crore in 2013-14, will now focus on "sustainable profitability" in the country.
"If GM is going to make significant investments, we need to be certain that they will generate significant shareholder value," the spokesperson said in an emailed response.
"Moving forward, our priority remains to establish the right business conditions for sustainable profitability."
When asked about the company scaling down Indian operations and downsizing manpower across verticals, including dealer development, sales and marketing, and aftersales, the spokesperson did not comment.
"We are consolidating our manufacturing operations in Talegaon for both domestic market and exports. Exports continue to be an important aspect of our operations in India indeed," the spokesperson added.
In 2016, GM India more than tripled exports compared to 2015 with 69,390 Chevrolet Beats shipped to Central and South America, the spokesperson said.
Currently, General Motors is in the process to sell its Halol plant in Gujarat to China's SAIC Motor Corporation after it decided to stop production there as part of consolidation of its manufacturing operations in India.