GM ends Chevrolet sales in India, South Africa

GENERAL Motors has announced that it will stop selling vehicles in the Indian market later this year and sell off its South African operations to Isuzu in a bid to focus its efforts in more profitable global markets.

The American giant confirmed that sales of Chevrolet models will stop in India by the end of 2017, but it will continue to build vehicles at its Talegaon assembly plant for export to other markets.

GM said in a statement that the decision followed a 2016 review of the company’s Indian product plans that determined its “greatest opportunity” to drive shareholder return would come from a renewed focus on exports from India.

The plan means that the Chevrolet brand will be phased out of the Indian and South African markets by the end of 2017.

According to an Automotive News report, GM only sold 49,000 vehicles in India and South Africa combined last year.

“As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company,” said GM Chairman and CEO Mary Barra. “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.

“Globally, we are now in the right markets to drive profitability, strengthen our business performance and capitalise on growth opportunities for the long term. We will continue to optimise our operations market by market to further improve our competitiveness and cost base.”

GM said the changes it has announced that relate to GM International – which covers Africa, the Middle East, Asia (except China) and Australia – were decided after a review of operations in these markets and “reflect a series of actions taken to improve global business performance that began in late 2013”.

One of the first actions was the December 2013 announcement that GM would close its Australian manufacturing operations and transition its Holden brand to a full-line importer from late 2017.

This followed GM’s decision earlier in December 2013 to withdraw the Chevrolet brand from Western and Eastern Europe and the UK.

Earlier this year GM sold its European Opel and UK-based Vauxhall brands to French giant PSA Group, leaving GM with Cadillac as it’s only offering in the wider European market.

The combined changes affecting GM International operations will result in a $500 million ($A671m) charge in the second quarter of this year, but the company says it expects to see annual savings of $100 million.

GM executive vice-president and president of GM International Stefan Jacoby said the company came to the conclusion that ending vehicle sales in India would lead to better results for shareholders.

“We explored many options, but determined the increased investment originally planned for India would not deliver the returns of other significant global opportunities,” he said.

“It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market. 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.” The company consolidated its Indian manufacturing operation by closing its Halol assembly plant at the end of April.

GM says its Indian technical centre based in Bengaluru, which performs global development work for GM cars, will continue to operate.

In South Africa, GM has sold its light-commercial vehicle manufacturing operations to Isuzu.

The Japanese company will buy GM’s Struandale plant and GM’s remaining 30 per cent share in the Isuzu Truck joint-venture. It will also take on GM’s Vehicle Conversion and Distribution Centre and the Parts Distribution Centre.

GM says it is working with PSA Group to determine future opportunities for the Opel brand in South Africa.

Other changes as part of the GM International restructure include selling its 57.7 per cent share in GM East Africa to Isuzu and withdrawing the Chevrolet brand from those markets, while the company will “streamline” its regional headquarters in Singapore.

GM says that it is working with employees and union representatives in affected markets to provide transition support.