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General Motors Chasing Indian Buyers
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General Motors Chasing Indian Buyers

General Motors aims to grab at least 5 percent market share in India within the next decade, as it sees that market overtaking Japan as the world's third biggest with projected annual sales of 8 million vehicles by 2025, Reuters reported on Monday.
The Detroit carmaker, which is losing money in India even after 18 years there, will unleash a production blitzkrieg aimed at reviving sagging sales, and will make India a new global manufacturing and export hub, taking some of the strain off South Korea, where labor costs have ballooned in recent years. As part of a strategic plan due to be announced later this year, GM will launch newly designed subcompact cars into India, where buyers are shifting from no-frills economy cars to models offering more room and features. India's autos market has been steady for the past few years, with annual sales of just above 3 million vehicles, but Jacoby sees that changing with Prime Minister Narendra Modi, who took office last year, vowing to reboot Asia's third-largest economy.
"India has gained back confidence," especially after Modi's election, said the 57-year-old, who joined GM from Volvo Cars in 2013. "We're pretty optimistic. We see growth potential in India, and believe there's a good opportunity for the Chevrolet brand to take share in this market. There's more prosperity and buying power. Vehicles selling for $5,000-$8,000 will more and more disappear in India."
The gradual pivot to India mirrors moves by Ford Motor and Nissan Motor to modify their strategies to give them the ability to ramp up exports from India. Under Jacoby, GM has been realigning its global manufacturing operations to squeeze out better profits. It has shuttered plants in Australia and Indonesia and is to scale down operations in Thailand.
"India's going to become a key global production and export hub for GM," said James Chao, Shanghai-based Asia-Pacific managing director at industry consultant IHS Automotive, noting India will partially replace South Korea as GM's key Asian export base.

  Bold Targets
By 2025, GM hopes to be selling 400,000 vehicles a year in India - a big jump on the 57,600 it sold last year, which gave it 1.8 percent market share. IHS, however, predicts GM's India sales still won't have topped 300,000 vehicles a year by 2025. GM lost 38.5 billion rupees ($604 million) in India in the year to March, according to a company filing with the corporate affairs ministry. GM said it would not comment on its financials. That would mean GM aiming to ship around 170,000 cars a year to Southeast Asia, Latin America and elsewhere by 2025. It began exporting out of India last September, and shipped just 2,154 vehicles by end-March.
The targets also suggest GM will have to more than double production capacity in India to 570,000 cars a year, from the 282,000 car annual capacity it currently has at assembly plants in Halol and Talegaon. With the new for-India models, Jacoby said GM plans to significantly boost the ratio of components made and bought locally to around 70 percent of the overall component content - making the cars more affordable.
GM already plans to launch two "image building" models into India: the Trailblazer SUV due in the second half of this year, and the Spin multi-purpose van due next year.

 

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