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Company - GENERAL MOTORS

Issue - NOT ABLE TO SUSTAIN IN INDIAN MARKET

About Company

General Motors India Private Limited is a partnership between General Motors and SAIC that is engaged in
the automobile business in India. General Motors has 93% stake in this partnership and the remaining 7% is
held by SAIC. It is the 5th largest automobile manufacturing company in India after Maruti Suzuki,
Hyundai, Tata Motors and Mahindra . After 21 years of operations in India, General Motors announced that
it will stop selling cars in India by the end of 2017, as a part of its global restructuring actions. General
Motors India's primary focus is the manufacture and export of small cars and automotive components. Its
export markets include Mexico and a few other Latin American countries. Its secondary focus is providing
parts and related services for the GM vehicles that were sold in India.

Reason behind General Motors exit from Indian Market:-


FACTS:-
1. Frequent changes in the corporate structure resulted in absence of a long-term strategy.(In 1994
partnered with Hindustan Motors at 50:50 ,went to.solo in 99 again changed its partner to SAIC in 2003)
2. Consistent churn at the top. GM, in over 21 years , had nine CEOs with an average tenure of 2.5 years;
in 35 years, Maruti is on its fifth CEO.
3. Lack of consistency in product strategy and marketing in India. GM made a debut under the Opel brand
with Astra and Corsa. These were neither big nor small with limited market. Later in 2003 they brought
in the Chevrolet brand. In 20 years they have introduced about 20 models of which 10 were withdrawn.
The price tags ranged from Rs 3 lakh to Rs 30 lakh. Frequent launches and withdrawal of models
demotivate customers who own such models.
4. A lack of products: What do Maruti and Hyundai, two of the strongest players in India have that makes
them so strong. A robust product pipeline that is diverse, affordable, reliable and contemporary. Both
Maruti and Hyundai have a diverse product portfolio, every Rs 10,000 can get you an entirely different
car. And both update their portfolio with an alarming pace so you never feel any single product is
outdated. General Motors' biggest drawback was an aging portfolio based on specific South East Asian
market products, which were not entirely global like their competitors products. The bulk of GM sales
came from just three products, the Beat, the Tavera and the Cruze, the latter despite its age continues to
have a strong following in the market. However, all three products have been flogged for so long, they
lost their appeal despite being mass players. In addition the Tavera got hammered because it did not
comply with certain emission requirements and General Motors tried to cover up those discrepancies,
think the Volkswagen scandal, albeit smaller, if you can call a nearly 1.2 lakh vehicle recall that! Anyway,
GM also flogged the Beat by introducing variant after variant, facelift after facelift, never really being
able to completely revamp that brand to keep up with the times.In comparison, newer cars cropped up
from Maruti, Hyundai, Nissan, Volkswagen, Skoda, Renault, etc which managed to snatch market share
away from General Motors. Even the Cruze lost out to newer & better products from Toyota, Skoda and
Hyundai, even though that end of the market was shrinking. A critical failure was the Captiva, though a
good product, the Hyundai Tucson-sized SUV for some reason never managed to capture enough
attention. Probably by this time the consumers had already started losing faith in the brand.
5. Network-General Motors had at one point in time a robust enough network with over 400 dealers, but
diminishing consumer confidence in the products and strained relations between consumers and dealers
(several claimed to be unethical with shady dealings) shrunk those numbers to just a little over 200
touchpoints
6. Outdated technology: Most of GM's cars barely matched up to what their competitors were offering.
The platforms themselves were nearly a decade old, the engines older. In trying to be cost efficient and
still meet certain emission requirements General Motors used technology that barely helped them scrape
through. With extremely low tolerance levels, these engines sometimes met the emission requirements,
sometimes they didn't! Plus, the quality of components over time got poorer and poorer. Cost cutting
measures forced
General Motors to use cheaper components. One of their last big launches, the Chevrolet Enjoy though
ideally positioned to capture a decent market share, lost out because the quality was simply shoddy.

YEAR Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
SALES 19,693.00 24,203.50 36,130.70 31,563.90 35,532.30 40,962.80 27,256.20 36,240.40 36,029.70 41,043.40

PAT 525.1 3.7 530.5 -3,502.10 -2,095.50 -38,124.60 -10,033.90 -6,810.00 -7,788.90 3,114.70

GROWTH%
TOTAL
INCOME 8.91 21.99 52.43 -11.53 13.58 -30.65 27.72 40.57 -7.49