GM Exits India
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Case Code: BSTR521 Case Length: 9 Pages Period: 2000-2017 Pub Date: 2017 Teaching Note: Not Available |
Price: Rs.300 Organization : General Motors Industry :Automotive Countries : India Themes: Business Strategy/Business Environment |
Abstract Case Intro 1 Case Intro 2
Introduction
On May 18, 2017, US-based automaker General Motors Company (GM) announced that it was exiting the Indian car market as part of its international restructuring exercise. The company said it would stop selling cars in India after December 31, 2017. Despite being an early entrant, GM had struggled to boost its sales and market share in India in part due to its failure to launch low-cost yet feature-rich vehicles that Indian buyers preferred and the high cost of maintaining and servicing Chevrolet cars, said some analysts. Commenting on the move, Stefan Jacoby (Jacoby), president of GM International, said “We explored many options, but determined the increased investment originally planned for India would not deliver the returns of other significant global opportunities. It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market.” However, GM would continue production in India, leveraging India’s skilled and low-cost labor force and lower raw material prices to supply to Mexico and Central and South America. The sudden announcement by GM left the company’s dealers a worried lot. Around 400 direct workers of GM’s Indian arm General Motors India Private Limited (GMPL) and thousands of employees at dealerships were facing the risk of losing their jobs...
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