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Chevrolet to Leave India by End of 2017

Chevrolet to Leave India by End of 2017

Dan Ammann, GM's global president, said the restructuring actions for India announced on Thursday in essence cancels "most" of the plan GM unveiled in 2015 to invest $1 billion in India to deploy newly-designed vehicle architecture as part of a Global Emerging Market vehicle programme or GEM for short, and build a new line of low-priced vehicles in India.

GM said it would no longer market its Chevrolet brand - its only brand of cars marketed in India - despite India's promise as a market set to overtake Japan as the world's third largest in the next decade. The company will phase out the Chevrolet brand in South Africa by the end of 2017.

GM has stated that its dealers have been notified of the move.

GM continues to struggle in India as sales have declined for the past six years after peaking in financial year 2011/12.

Before the business transfer, Isuzu will purchase from GMSA a 30% equity stake in ITSA, which assembles and distributes Isuzu commercial vehicles, whereby Isuzu will transform the company into its wholly-owned subsidiary with a new company name of "ISUZU MOTORS SOUTH AFRICA (Tentative)".

According to the GM website, the company has promised that even as it works towards a "business transition by the end of 2017" that the changes will not impact customers as existing warranties and service plans will be honoured beyond 2017.

Although Trade and Industry Minister Rob Davies said GM's departure from South Africa was no surprise, it remains a devastating decision for us.




GM President Dan Ammann told Reuters in an interview that the latest restructuring moves - and a series of earlier decisions to quit unprofitable markets - allow GM to focus more money, engineering effort and senior management time on expanding where the company is strong, including China and the North American pickup and SUV business, where GM has a "product onslaught coming". Its Talegaon plant has a capacity of 130,000 vehicles a year.

Those cars are primarily sold in Mexico, Central America and South America.

Last year, Ford Motor had shelved its plans to produce a new compact auto family, designed mainly for emerging markets from India, as per a Reuters report.

Ongoing after-sales and parts support will continue for all Chevrolet customers to the end of 2017.

"The market opportunity for GEM has continued to grow", he said.

One of the upcoming cars from the company, the Chevy Beat is not going to see its launch happening in India. GM's volume in India fell by a fifth to 25,823 vehicles in the year ended March 31. But for India, GEM was still too pricey a technology since it has been designed under GM's global vehicle safety, performance and other standards. (GM) announced a restructuring of its global operations to focus its capital and resources on business opportunities as well as markets expected to deliver higher returns. "May be GM will come back to India with right products and right strategy in future".

"We have made the decision that these two options are not for us", Jacoby said.


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