American automotive giant General Motors has announced that it will no longer sell cars in India after struggling for two decades in one of the most competitive markets in the world. GM's decision comes as a big blow to PM Modi's 'Make in India' program which encourages domestic manufacturing.
According to Reuters, General Motors will no longer market its 'Chevrolet' brand of cars in the country where it currently has less than a one percent share of passenger car sales. However, General Motors will not completely exit India and plans to use the country as an export hub.
General Motors will continue to operate its technology centre in the city of Bangalore. The American carmaker currently has two production facilities in India: the first in Halol, Gujarat and the other in Talegaon, near India's financial capital of Mumbai. GM plans to sell the Halol assembly unit to Chinese automotive firm SIAC and will convert the Talegaon facility into an export hub.
Speaking about the decision to convert the Talegaon assembly facility into an export only factory, Steven Jacoby, GM's chief of international operations in an interview stated, "We are not giving up benefits India offers as a local cost manufacturing hub with an excellent supplier base which is extremely competitive."
GM exported 70,969 vehicles from Talegaon to Mexico and the rest of Latin America in 2015/16, nearly doubling its exports from the previous financial year. The Talegaon facility has a total capacity of 130,000 units per year.
GM claims that it had two options if it wanted to be successful in India. The first would see the company ditch implementation of global platform and vehicle standards. The second would see it partner up with a local automotive group to run full operations as an automaker designing products, manufacturing, and marketing products locally. However, Jacoby stated that GM Decided that "these two options are not for us."