General Motors entered India in 1996 and to this date, the company hasn’t been able to understand the market. The American car maker was among the first few to enter India after the economy was opened to foreigners in 1991, with majority of manufactuers entering India after 1998. GM has two plants in the country, both of which are under utilized (only 38% utilisation). The company initially entered with Opel branded cars (Corsa and Vectra), which were a nightmare when it came to repairs, since parts were imported from Germany, thereby costing a fortune.
In early 2000s, GM discontinued the Opel range and brought in Chevrolet, with the launch of the Forester and Optra. Later the Aveo twins,the Captiva and Tavera followed. GM then brought the Spark, Beat and Cruze to the Indian market. Just recently the company launched the Sail twins. In just three months of launch, GM has announced price cut on the Sail hatchback, which has been very poorly received by Indians. The vehicle looks very bland and has been developed by SAIC of China. Despite GM India’s marketing team urging them to bring the Sonic twins, GM went ahead with the Sail.
What this has resulted in is high amount of losses. GM posted a loss of Rs. 746 crore ($138 million) last fiscal and lost Rs. 67,600/- ($1250) on every vehicle they sold. No wonder TTAC put it rightly last year, GM does live and die with China.
Faisal Ali Khan is the editor of MotorBeam.com, a website covering the automobile industry of India.