General Motors rethinks India plans, defers $1bn investment
23 Jan 2017
General Motors, which is yet to establish firmly in the Indian market, has put on hold its investments on new models ahead of full review of its future product portfolio in the country, say reports.
The company, which had in 2015 announced plans to invest $1 billion to expand manufacturing operations and roll out 10 new car models, has now put a 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," PTI quoted a General Motors official spokesperson as saying.
While announcing plans to strengthen business in India, China, Mexico and Brazil through the development of a new family of vehicles known as Global Emerging Markets (GEM) platform, General Motors CEO Mary Barra had said the company would invest $1 billion in India in 2015 (See: GM to invest $1 bn in India, launch 10 all-new vehicle models).
Since then, GM India had launched the SUV Trailblazer while the multi-purpose vehicle, Spin is yet to be launched in India.
General Motors India, the Indian arm of US auto major General Motors, currently sells a range of vehicles, including hatchback Beat, sedan Cruze and multi-purpose vehicle Enjoy, among others.
GM India, which has managed to cut its net loss to Rs1,003.39 crore in 2014-15 from Rs3,812.46 crore in 2013-14, will now focus on "sustainable profitability" in the country.
GM is uncertain that the new investment will help improve profitability and is unlikely to make significant investments without an assurance on sustainable profits.
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 of selling its Halol plant in Gujarat to China's SAIC Motor Corporation, after it decided to stop production there.
Much will also depend on how the new American President Donald Trump pushes his brand of `Make in America'.
