At a time when global automakers like Kia Motors, SAIC, Changan, Beiqi Foton, and Fiat, are planning to enter India, American automaker General Motors is going to stop sales in the country by December 31, 2017. This decision is going to impact around 8 per cent of the company's total workforce in the country.
Kaher Kazem, General Motors India president and Managing Director, said, "At present, General Motors have a workforce of 6000 people in India. Out of this 6000, approximately 400 i.e., 8 percent of the total workforce will be impacted by this decision."
However, he said that General Motors is retaining a significant amount of operations in India as its Talegaon plant will remain a manufacturing hub with the focus on export markets and upcoming export vehicle launches. There won't be any impact on the manufacturing workforce.
The company has been incurring losses in terms of domestic sales in the country. After a comprehensive review, the company determined its greatest opportunity in India to drive shareholder return rests on focusing on exports from India.
Kazem said, "Exports account for around 90 per cent of our manufacturing in India. Now it will become 100 per cent. Stopping domestic sales was a tough but necessary decision, and I am optimistic about the same."
In the financial year 2017, General Motors was the sixth largest passenger vehicle exporter from India with exports increasing from 37,082 units to 70,969 units, thereby representing a jump of 91 per cent, according to Society of Indian Automobile Manufacturers (SIAM).
General Motors India informed employees of the decision on May 18. The company will work closely with affected customers and dealers on a transition plan. The customer support centre will remain open and all warranties and service agreements, as well as ongoing service and parts requirements for all vehicles, will continue to be honoured.
The General Motors Technical Centre-India (GMTC-I) in Bengaluru, which performs global work for General Motors, will not get impacted by this announcement.
With the automaker, now focussing only on exports from its Talegaon plant, Kazem added, "Strategic options to further improve and utilise our capacities and return on investments will be on the cards. There could also be collaborative options."
This decision is quite opposite to Prime Minister Narendra Modi's Make in India vision which aims to make the country a global manufacturing hub. However, Kazem said, "this is strictly a business decision and not related to any government or any other policy."
