The end of road for General Motors in India

This week General Motors (GM) announce that it is pulling out of selling cars in India and the current manufacturing plant would be used for exports. GM’s Chief Executive Officer Mary Barra is scrapping a $1 billion investment in India and halting sales of Chevrolet models there altogether. Currently GM has less than 1% of share in total car market. Remember GM came into India in 1994 before Toyota, Volkswagen and even before Hyundai. But GM was lost somewhere in crowed space.

GM India was the rising start of Indian Automotive industry 5-7 years back. GM’s Beat was a stylish hatchback, Cruze was setting the benchmark for diesel sedans and Tavera was also doing well. The company was aiming for 5% market share. But the things changed rapidly after the departure of then CEO Karl Slym. Tavera failed to clear emission norms and GM was forced to withdraw the somewhat popular model. The main problem of GM was consistency in terms of leadership, models, brands etc. GM India had 9 CEOs with an average tenure of 2.5 years in 21 years and Maruti had just 5 CEOs in last 35 years. GM India started in 1994 with Hindustan Motors in a 50:50 joint venture. Then GM bought out HM’s stake in 1999 in that JV and went solo. Due to global economic crisis of 2008-09, GM became 50:50 JV with SAIC, its Chinese partner. In 2012 it bought 43% of the Chinese partner’s holding, raising its stake to 93%. There was so many confusion in GM’s strategy in India as GM India reported to GM Asia Pacific division and that headquarter micromanaged GM India operation. GM made a debut in India under the Opel brand with Astra and Corsa. These were neither big nor small with limited market. Later in 2003 they brought in the Chevrolet brand and stopped selling Opel brand altogether. Around 2012 they shifted to Chinese models.

India is going to become 3^rd largest automotive market soon and many global auto giants have tried to create a foot hold in India. In India many global biggies like Ford, Toyota, Volkswagen etc. have struggles to capture 5% market share. But they have managed to hang on Indian market with some successful models. GM India delivered many promising cars but not even a single car went to win consumer’s confidence over a long period of time. Beat, Cruze, Tavera all showed promise but they faded gradually. GM failed to bring an India specific model & paid price for that. It has been seen over and again that rarely global vehicles succeed in India without India specific adjustments. India automotive industry has a huge potential and Suzuki is reaping its benefit. Its subsidiary Maruti sells more cars than Suzuki and Maruti has close to 43% market share in India.

The main focus of GM CEO Mary Barra is profitability and that’s why the company is shutting down it operation in India and SA. This march GM sold its European brands to French Peugeot. GM exited Russian market in 2015. But many analysts are of the opinion that GM should not have pulled out from a growing country as India. GM stayed here for 21 years and should have tried once again with one vision. But CEO is the best person to decide the company’s future. Who knows GM’s decision to quit India may be a big blunder? Or it may turn out a wise decision. Let us leave the answer of this question to history.