General Motors' market share goes below 1% in India

This, a year after its global Chief Executive Officer Mary Barra announced ambitions to make the Indian operations sustainable

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General Motors, the world’s third largest automobile maker, has seen a consistent fall in its market share in India over the past one year.

A year after its global chief executive officer Mary Barra announced ambitions to make the Indian operations sustainable its share has fallen below one per cent in a growing car market. The saving grace for the firm remains a rise in exports.

Announcing its decision to shut the Halol (Gujarat) plant and for capacity expansion in Talegaon (Maharashtra) with a $1-billion (Rs 6,755 crore) investment, Barra said in July last year the company was restructuring and consolidating its Indian operations to have a sustainable business.

The company had invested about $1 billion in the country since 1996, when the Halol plant was set up, but its Indian operations remained marred by losses. In FY15, the company incurred a loss of Rs 1,033 crore. The loss in FY14 was much higher at Rs 3,812 crore.

In the April-May period this year, GM sold 4,678 units in the country, with a market share of 0.98 per cent, Society of Indian Automobile Manufacturers data showed. In the year ended March 31, 2015, GM had a small share of two per cent, which slipped further to 1.2 per cent in the year ended March 31, 2016.  

Exports rose to 7,217 units against a mere 590 units in April-May 2015.

Its decision to shut down its Halol plant by the end of June this year has also not played out.

Last week, the company said it would continue production at the Gujarat unit till March next year.

“We are exploring a number of options in relation to the Halol site, including its sale. Selling the plant may include contract manufacturing to ensure continuity for the upgraded Chevrolet Tavera. This extension will ensure an orderly transition for employees, suppliers and other stakeholders,” the company said. China’s largest automaker, SAIC, has been reportedly in talks to buy the plant to enter the Indian market.

To give a perspective, Maruti Suzuki’s crossover S Cross which is considered to have a limited success sold 4,600 units in the April-May period. GM’s position in the domestic market slipped from eighth in FY15 to eleventh now, just ahead of Skoda and Fiat. Globally, GM sold 9.8 million vehicles in calendar year 2015 to end as third largest after Toyota and Volkswagen.

The company is confident of expanding its share. “Chevrolet aims to significantly increase its market share in the next five years by delivering quality products and care that our customers in India expect and deserve along with an enhanced customer experience,” a spokesperson for GM India said.

While its existing product line up continues to lose volumes, it is pinning its hopes on the new products. “We have a strong plan to launch at least five new Chevrolet models within the space of 24 months including the new Trailblazer, new Beat, Essentia, new Cruze and Beat Activ,” the spokesperson said. It is not that the company does not have a product portfolio now. It has eight products available and is present is the small car, sedan and utility vehicle segments.  

It is also learnt that a number of unhappy GM dealers have exited the brand to move to rivals. The company did not specify the number of such dealers. Considering its 202 sales points and monthly total volumes of average 2,300 units, monthly sales average for one sales point works out to just 12 units.

“In order to create a sustainable business environment for us and our dealers, we have taken some important steps in the past 18 months. The focus is on consolidating our network and enhancing the quality of the existing dealerships in order to provide a great customer experience,” she said.