Abstract

This case is about US-based automaker General Motors Company’s (GM) exit from India and the resultant complications to its dealers and customers. The move came after GM’s efforts at expanding its market share in the country failed to gain much traction. GM started on a successful note in India with its Opel cars and later on with Chevrolet cars but it failed to sustain the momentum due to its lack of consistency in leadership, brands, and models. The tough competition in the Indian auto car market and the dominance of Maruti Suzuki and Hyundai in the small car segment only added fuel to the fire. GM was not able to survive in the Indian market with less than 1% car sales in the country and decided to exit. GM said it would, however, continue its production in India owing to the cheap cost of production and export the cars to Mexico and Central and South America. GM’s strategic failure to even moderately succeed in the booming Indian car market could be attributed to the company’s inability to understand the Indian market and the customers’ preferences and to make viable cars that suited the Indian market.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the nature of problems faced by General Motors in India
• Examine the reasons that prompted General Motors to exit India
• Understand the implications of leaving demanding markets
• Study and analyze General Motors’ divestment strategy in India
• Understand the nature of problems faced by foreign companies like General Motors in developing markets like India

Keywords

General Motors, Business Strategy, International operations, Globalization, Indian automobile Market, Divestment strategy, Competition, Entry Strategy