GM puts on hold new-model investment in India

It is understood that American carmaker General Motors has put on hold its planned investments on new models for India as the company undertakes a full review of its future product portfolio for the country. 

This development comes even as GM has anounced plans to roll out 18 new and refreshed models in 2017 to drive growth in China, its largest global market. Half of the models to be introduced in 2017 under the Buick, Chevrolet, Cadillac, Baojun and Wuling brands will be SUVs or MPVs. The products are expected to build on GM’s 2016 sales record of 3.87 million vehicles. 

GM, which recently came under fire from US president Donald Trump for maufacturing the Chevrolet Cruze in Mexico, has not put any timeline for lifting the 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 GM official spokesperson told PTI.

On July 29, 2015, GM CEO Mary Barra had announced that it would be investing $5 billion to strengthen its business in global growth markets through the development of an all-new vehicle family known as the Global Emerging Markets (GEM) platform. This included a $ 1 billion investment in India to revive its business with 10 new models in 5 years. The investment was to be made at its Talegaon plant, near Pune, while the Halol plant in Gujarat was planned to be shut down by the second half of 2016 to rationalise its domestic production.

GM's original plan, as announced in July 2015, was to launch 10 new models in India across the next five years, beginning with the Trailblazer SUV in October 2015 and the Spin MPV in early 2017. The Trailblazer SUV was first of the new models to be launched, when it was rolled out in October. But plans to launch the Spin MPV, which was expected to be carried out in early 2017, were shelved last year. Plans are also underway to introduce the new Cruze, the Beat hatchback, as well as the Beat notchback.

Currently, GM India sells the Chevrolet Beat hatchback, Sail sedan, Enjoy MPV and the Tavera MUV in the domestic market.  

GM, whose Indian arm has managed to cut its net losses 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 India.

"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, the PTI report said. "Moving forward, our priority remains to establish the right business conditions for sustainable profitability."

GM is among the four global carmakers in India which are utilising their manufacturing capacity to drive exports. GM India curretly exports the made-in-Talegaon, left-hand-drive Beat to Mexico, Chile, Peru, Central America and the Caribbean countries (CAC), Uruguay and Argentina. 

In CY2016, GM India more than tripled exports compared to 2015 with 69,390 Chevrolet Beats shipped to Central and South America.

In April-December 2016, GM India has sold 20,888 units in the domestic market, down 14.6 percent year on year. On the export front in the same nine-month period, the carmaker has despatched 50,519 units, recording 155 percent YoY growth. 

SAIC Motor Co eyes Halol plant

In line with its decision to stop production at its Halol, Gujarat plant, which was set up in June 1996 and has a manufacturing capacity of 110,000 units per annum, GM was scouting around for a buyer for the Halol plant. Around end-2016, it is learnt that a subsidiary of SAIC Motor Corp, China’s largest automaker, had applied to the Competition Commission of India (CCI)  to acquire these assets of GM India. Earlier this month, the CCI has cleared the proposed acquisition. This will enable SAIC to enter the Indian market. Stay tuned for more updates.

Also read: 
GM plots 18 models in 2017 to drive growth in China