General Motors puts $1bn India plan ‘on hold’

General Motors has put on hold a planned $1bn investment in India as it reassesses its strategy in the country.

Its sales in India have fallen nearly 40%, and its share of the passenger vehicle market has also dropped.

A regulatory crackdown on diesel vehicles has also led the company to rethink its plans.

More than 5,000 new cars are sold in India every day - and it is forecast to be the world's third biggest vehicle market by 2020.

In 2015, Ford committed to investing $1bn in India to boost its domestic market share and make the country a global export hub.

"In addition to the shift in customer preferences, the industry is facing unprecedented regulatory uncertainty. Like our competitors, we are paying close attention to how this impacts our business. In light of this, we are conducting a full review of our future product programme in India," Swati Bhattacharya, a spokeswoman at GM India said.

"As a result, we are also putting on hold future investment in our all-new vehicle family in India until we firm up our product portfolio plan."

Things have not gone to plan for the company since it unveiled its vehicles for India at the country's biggest auto show a few years ago.

But while GM's share has fallen below 1% in the domestic market, the automaker, which has two factories in India, has seen a rise in exports.

Exports rose to 7,217 units in April-May this year, against 590 units in the same period last year.