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General Motors Puts $1B Expansion Plans for India on Hold

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Mary Barra visited India this week.

General Motors is walking back previously-announced plans to invest $1 billion in India in order to reassess its strategy, Automotive News reported last week.

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Sales of GM vehicles in India have fallen off approximately 40% in this fiscal year, bringing the automaker’s domestic passenger vehicle market share under 1%. In July of last year, General Motors’ Managing Director for India, Arvind Saxena, told Reuters that the company’s expectation was that it would see a “green balance sheet” within five years’ time. The belief, as of May 2015, was that India would eclipse Japan as its third largest market within a decade.

As a consequence of this projection, GM had pledged $1 billion to grow sales and market share and manufacturing for both domestic sales and exports. This would include the launch of a new MPV, the Chevy Spin, as well as the creation of a new modular platform for the creation of economy vehicles. Lagging sales have forced a reassessment and the at-least-temporary withholding of investment funds.

“The billion dollars was committed based on a certain product portfolio,” Jack Uppal, vice president, marketing at GM India told Reuters. “As the product program could change, the amounts that are required to invest would also change.”

Uppal did note that while the launch of the Spin has been delayed indefinitely, it will be replaced by a compact crossover and, more eminently, the launch of compact cars like the Beat Activ and Essentia.

“We are conducting a full review of our future product program in India,” said Swati Bhattacharya, a spokeswoman at GM India. “As a result, we are also putting on hold future investment in our all-new vehicle family in India until we firm our product portfolio plan.”

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News Source: Automotive News (subscription required)