GM to stop selling vehicles in India, focus on exports

American auto major General Motors will stop selling its vehicles in India by the end of this year, unable to turnaround its fortunes here after struggling for over two decades to make a mark.

The company will now focus on exporting vehicles from its manufacturing plant at Talegaon in Maharashtra after it stopped production at its first plant at Halol in Gujarat last month.

The decision will impact around 400 employees of GM India engaged in domestic sales and after sales activities. GM said the step follows a comprehensive review of future product plans for GM India and is part of a series of actions taken by it to address the performance of its operations worldwide.

GM has also exited four other international markets, including Russia and Europe. GM Executive Vice President and President of GM International Stefan Jacoby said that after exploring many options the company determined that the increased investment originally planned for India would "not deliver the returns of other significant global opportunities".

"It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market," he said in a statement.

GM's sales in India were down nearly 21 per cent in 2016 -17 to 25,823 units. Its production, however, grew about 16 per cent to 83,368 units most of which were exported. In 2015, GM had announced plans to invest USD 1 billion to enhance manufacturing operations and roll out 10 locally produced models in India while deciding to stop production at its first plant at Halol in Gujarat.

However, struggling to make a turnaround in India, the company put on hold the plan and undertook a full review of its future product portfolio here. GM India has been incurring losses over the years but it managed to cut net loss to Rs 1,003.39 crore in 2014-15 from Rs 3,812.46 crore in 2013-14.

"Difficult as it has been to reach this decision, it is the right outcome to support our global strategy and deliver appropriate returns for our shareholders," Jacoby said. The company had informed employees of General Motors India about the decision.