General Motors' Exit from India – A Wise Move?
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Case Code: BSTR525 Case Length: 20 Pages Period: 1920-2017 Pub Date: 2017 Teaching Note: Available |
Price: Rs.600 Organization: General Motors India Pvt. Ltd. Industry: Automotive Industry Countries: India, Global Themes: International Business Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
In June 2017, after General Motors India Pvt. Ltd.’s (GMI) decided to exit the Indian market, some of its dealers planned to initiate legal action against the company and its subsidiary Chevrolet Sales India Pvt. Ltd (CSIPL), for being offered compensation which they claimed was arbitrary. One of the dealers said, "The compensation package (on offer) has a lot of riders, which are very uncomfortable…there will be some who opt for arbitration as there is a clause for that. Some will also opt to file criminal and civil cases."
GM was one of the first global automakers to enter India after the economy was liberalized in the early 1990s. The company set up a joint venture (JV) along with Hindustan Motors Limited (HM) to produce mid-size cars under the Opel brand. In 1999, GM took complete ownership of the JV. However, the Opel brand failed to resonate with the masses, prompting the company to introduce cars under the Chevrolet brand in 2003. The cars under the Chevrolet brand experienced moderate market success.
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