GM will cut operations in India, South Africa


South Africa committed to continuing to provide service and parts support for Chevrolet customers.

General Motors and Isuzu Motors today announced their respective future plans for the Isuzu, Chevrolet and Opel brands in South Africa, subject to local regulatory requirements.

Purchase the Struandale manufacturing plant and GM's minority shareholding in Isuzu Truck South Africa (Pty) Limited to continue manufacturing the Isuzu KB and medium- and heavy-duty commercial trucks in Port Elizabeth. Rumours suggest that Chevrolet might continue to employ the service staff for the next 2 years in order to cater to all after sales needs of its existing customers.

General Motors (GM) informed employees and unions on Thursday morning that it is quitting SA.

"We explored many options, but determined the increased investment originally planned for India would not deliver the returns of other significant global opportunities", said Stefan Jacoby, president of GM International, in a statement.

In fact the company also mentions that it is committed to maintain a service network across key locations with staff trained to take care of all the needs for fix and maintenance.

The company added that GM Technical Centre-India (GMTC-I) in Bengaluru will not be impacted by this announcement.

American auto major General Motors today chose to stop selling its vehicles in India as it failed to turnaround in its fortune here after struggling for over two decades to make a mark. Strangely, the decision to pull out of the race comes at a time when market watchers predict a higher growth rate in the passenger auto segment in India in the coming decade.

"Light vehicle sales are in recovery mode since the negative consumer sentiment is subsiding with the easing cash situation, and buyers are slowly returning to the market in the aftermath of the government's demonetization drive in the final months of 2016", LMC Automotive said in a March report.

Though the shift will see Chevrolet vehicles phased out in both South Africa and India, the company will maintain its manufacturing operations in Talegaon, India.

While selling cars in a market with millions of new buyers annually increases scale, turning a profit is hard there, and other auto makers have expressed frustration.

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.

General Motors pulling its Chevrolet brand out of India, South Africa and East Africa by the end of this year. Since then, auto sales overall in India have slumped, and GM has failed to gain traction against incumbents such as Maruti Suzuki India Ltd. Years later, in 1995, it returned to India via an equal joint venture with Hindustan Motors and sold cars under Opel brand. Isuzu also will assume control of a parts distribution center in the country.

Existing Chevrolet customers will continue to be supported in the market, the company said.