US probe, car recalls not to hurt India operations, says GM
HOPE OF RECOVERY World No 2 auto maker languishing in India, but new president says company not giving up
NEW DELHI: The world’s secondlargest car maker General Motors is at present subject to a controversial probe on delayed recall of cars in the United States but the company says there has been a little impact on the demand in India.
The company’s newly appointed president Arvind Saxena, a three-decade old industry veteran with stints in Escorts, Maruti Suzuki, Hyundai and Volkswagen in the past, said GM has lost its way in India in the last 1-2 years but its Chevrolet brand remains strong and a revival is in the works.
The company’s parent firm in the US is at present embroiled in a Congressional probe over 13 deaths in a decade largely due to the company’s slow response to defective ignition switches in its cars. While the recall does not have any bearing in India, such instances have hampered brands in the past.
“I don’t think the recall has a significant impact on GM India,” he said. “Almost every car maker has recalled cars. It does not mean consumers have stopped buying their products. It only means the manufacturer is responsible and transparent.”
The company has its own set of recall troubles in India. Last year, it recalled 114,000 units of its people mover Tavera to fix emission issues. Later it was found that GM employees colluded to fudge data to pass the mandatory compliance tests and
STRUGGLING IN INDIA
General Motors India recalled 114,000 units of its people mover Tavera to fix emission issues in 2013
Later, it was found that GM employees colluded to fudge data to pass the mandatory compliance tests; a government
a government probe called it a corporate fraud.
“We have taken all necessary steps to ensure this never happens again,” Saxena said. “Our quality processes are more stringent and tighter now.”
The company is struggling on sales as well. GM India’s last three products--Sail sedan and hatchback and Enjoy multi purpose vehicle--have found few probe termed it a “corporate fraud”
In 2013-14, the company’s sales declined by 8.5% to 80,894 units on the back of a near 20% decline in 2012-13 GM is now the seventh largest car maker in India.
takers in a market that has been choppy and even after a 2 decade existence in India, GM finds itself with accumulated losses of `2,740 crore. In 2013-14, its sales declined by 8.5% to 80,894 units on the back of a near 20% decline in 2012-13. It is now the seventh largest car maker in India.
“I am new to the company for now but my perception is that the sales and distribution network of GM is average and not exceptional. My priority is to change that,” he said. “Not all new cars do well in India so that is not the only way to post a turnaround. We can do a lot better with our current portfolio and there is a lot of potential. Nobody likes to make losses but GM is not giving up on India.”
WHILE THE RECALL IN UNITED STATES DOES NOT HAVE ANY BEARING IN INDIA, SUCH INSTANCES HAVE HAMPERED
BRANDS IN THE PAST.