GM Mounts Heavy Losses In India

Faisal Ali Khan
by Faisal Ali Khan
gm mounts heavy losses in india

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, a website covering the automobile industry of India.

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13 of 18 comments
  • SV SV on Mar 20, 2013

    I wonder if GM's Brazilian offerings (Onix, Prisma, Agile, Cobalt) might do better in India? From what I understand both markets have similar requirements in terms of toughness (poor roads) and affordability. If the ethanol-optimized engines would have to replaced I could see that being a stumbling block, but otherwise...

    • See 2 previous
    • Faisal Ali Khan Faisal Ali Khan on Mar 21, 2013

      @MrWhopee They are getting the Chinese Enjoy MPV.

  • Corey Lewis Corey Lewis on Mar 20, 2013

    So in 96 maybe you could've imported a tough Roadmaster there. Ha!

  • SaulTigh SaulTigh on Mar 20, 2013

    Well let's see. Every Indian that lives in my apartment complex (and there are many) drives either a Nissan (any kind, but mostly Altimas) or a Toyota Camry. The only Hondas they seem to drive are Odysseys. Only one of them drives an American car, and he must be a gear head because it's a late 90's Camaro. I'm guessing American cars don't register with these folks at all. Did I mention that their driving skills do nothing to dispel stereotypes?

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    • Faisal Ali Khan Faisal Ali Khan on Mar 22, 2013

      Indyb6, the obsession with Honda and Toyota is in India as well. People buy Honda, Toyota blindly, even Suzuki for that matter. They stay away from Ford and GM though.

  • Corntrollio Corntrollio on Mar 20, 2013

    Faisal, what is replacing the Ambassador as the taxi vehicle of choice, now that they can no longer be livery vehicles? You think the Panther taxi was on an old platform? The Ambassador dates back to the Morris Oxford III of the 1950s.

    • Faisal Ali Khan Faisal Ali Khan on Mar 21, 2013

      Corntrollio, the Ambassador is being replaced by a multitude of products, including the Renault Logan (Mahindra Verito), Suzuki SX4, Toyota Etios, etc.