Barely a few weeks after announcing
that it is shutting operations in its plant in Halol in Gujarat, the company
has now announced that General Motors
India will focus on its growing vehicle export manufacturing operations and
cease sales in the domestic market by the end of 2017. Thus, the Talegaon plant
near Pune in Maharashtra will serve only as an export plant for the company. GM
India informed employees of the decision on May 18, 2017.
The GM Technical Centre-India
(GMTC-I) in Bengaluru performs global work for GM. This work is not impacted by
Incidentally, the company had
invited Indian journalists for a test drive of their latest Chevrolet Beat car
in the end of May 2017. This will obviously stand cancelled.
“Our decision in India is an
important milestone in strengthening the performance of our GM International
operations and establishing GM as a more focused and disciplined company,” said
Stefan Jacoby, GM executive vice president and president of GM International.
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.
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.
The decision, which follows a
comprehensive 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 greatest opportunity in India to drive shareholder return rests on focusing
on exports from India, said a GM India press release..
Jacoby said, “We 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 us 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 our global strategy and deliver
appropriate returns for our shareholders.”
This announcement is
consistent with GM’s global disciplined allocation of capital and investment in
its business around the world designed to generate stronger returns and drive
“GM India’s export business has tripled over
the past year,” Kazem said. “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,” he added.
“We will support our affected
customers, employees, dealers and suppliers,” Kazem said. “Chevrolet owners can
be assured that we will continue to honor all warranties and provide
comprehensive aftersales support.”
The company will work closely
with affected customers and dealers on a transition plan. The customer support centre
will remain open and all warranties and service agreements, as well as ongoing
service and parts requirements for all vehicles, will continue to be honoured,
said the company.
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