General Motors to pull out of India

General Motors India has announced its exit from India, and plans to retire the Chevrolet brand in the country by end of 2017. The move is the carmaker’s bid to shift focus to key markets, and increase profitability globally.

Besides India, the manufacturer is also reconsidering operations in East and South Africa.

While the brand will be pulled out of India, seeing the strong demand in markets abroad, GM’s plant in Talegaon will continue to produce Chevrolet cars for export markets. The plant is capable of producing up to 1,60,000 units annually.

According to the carmaker, the requisite bump in investment required for bringing in new products into India wouldn’t have resulted in a leadership position, plus, it wouldn’t be profitable in the long term. These factors played a crucial part in the company’s pull-out.

GM recently stopped production at its facility in Halol, Gujarat, which it plans to sell to China's SAIC Motor Corporation. The Halol plant, set up in June 1996, initially produced Opel cars, and then Chevrolet models; the Tavera is the last model it produced before being shut down.

The brand has never had strong presence in India, and accounts for under 1% of cars sold here annually. Furthermore, sales have been on a decline, but interestingly, exports for the carmaker have seen an 89 percent spike from March 2016-17.

While the withdrawal from India will pinch GM, the move was necessary to stem losses. It remains to be seen if the carmaker will make a re-entry into India, which is not difficult as it has a functioning plant here.