General Motors Will Stop Selling Cars in India (GM)

General Motors says the move is aimed at driving stronger financial performance and focus its capital and resources on business opportunities expected to deliver higher returns

The company will cease the production and sale of Chevrolet vehicles in the country, it announced.

GM expects to book a charge of about $500 million during the current quarter to cover the moves in India and South Africa.

The manufacturing plant in Struandale will be sold to Isuzu along with GM's 30% stake in the Isuzu Truck SOuth Africa joint venture.

GM also said that it will offload its South Africa manufacturing to Isuzu Motors. Importantly, existing Chevrolet and Opel customers will continue to be supported in the market.

The auto maker informed employees and unions of the announcements this morning and will begin the formal consultation process with them immediately.

The move is part of the U.S. automaker's restructuring of its global business to focus on the markets with higher returns. The company will phase out the Chevrolet brand in South Africa by the end of 2017. The country has a population of 1.3 billion and is set to overtake Japan as the third-largest market in the world within the next ten years. GM said it has a weak position in that market, selling around 20,000 vehicles there a year ago.

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"Car penetration levels are quite low in India, but with increasing disposable income" the opportunities are many, he said.

GM also announced on Thursday that it would cease Chevrolet sales in India by the end of 2017.

GM said the actions will save it $100 million annually. GM officials will also be discussing the possible severance packages to the existing employees that are expected to be affected by the shutdown of its domestic operations. "We are committed to deploying capital to higher return initiatives that will enable us to lead in our core business and in the future of personal mobility".

Last month it shut its facility at Halol in Gujarat, where it produced Opel and Chevrolet cars.

"The market opportunity for GEM has continued to grow", he said. The decision of GM Motors comes as a severe blow to the Indian government and especially for the Make in India campaign, which encourages auto makers to manufacture cars in India. Exports for GM India will continue through its Talegaon plant located in Pune. While GM will continue to operate its plant in India, where the automaker employs about 5,000, but will reduce its workforce by about 8%, or 400 employees. In short, no new Chevrolet model will be launched in India from now on - locally made or imported. Mr. Ammann said. GM's recent investments in companies like ride-sharing company Lyft and the purchase of San Francisco autonomous-vehicle startup Cruise Automation "forces a resource-allocation discussion".

This decision does affect that current owners of Chevrolet cars as well and for those who are wondering what will happen to their cars, well the company says that "Chevrolet customers can rest assured the customer support center will remain open and all warranties and service agreements as well as ongoing service and parts requirements for all vehicles will continue to be honoured".

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