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General Motors Ceasing Sales In India, South Africa

General Motors Ceasing Sales In India, South Africa

General Motors has announced plans to withdraw from two more global markets. The automaker intends to cease sales in India and completely divest itself from the South African market by selling its assets to partner Isuzu. The new comes just months after GM sold off its European operations to French automaker PSA.

GM will retain its manufacturing assets in India. That plant will continue to manufacture vehicles for export markets in Mexico and South America.

“As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company,” said GM Chairman and CEO Mary Barra. “We are committed to deploying capital to higher return initiatives that will enable us to lead in our core business and in the future of personal mobility.

“Globally, we are now in the right markets to drive profitability, strengthen our business performance and capitalize on growth opportunities for the long term. We will continue to optimize our operations market by market to further improve our competitiveness and cost base.”

GM began an extensive review on its global assets back in 2013. It says this review has led to today’s announced changes. In addition to shifting more capital to technology advancements, these moves are likely an effort to strength GM’s operations in Brazil and China. The company seems intent on narrowing its focus to markets in which it already has a leadership position.

“These actions will further allow us to focus our resources on winning in the markets where we have strong franchises and see greater opportunity,” said GM President Dan Ammann. “We have compelling plans for growth in both the top line and the bottom line as we invest for the future.”

A direct aid to the company’s bottom line will come from selling its South African assets to Isuzu. Isuzu will purchase GM’s Struandale assembly plant as well as its 30 percent stake in Isuzu Truck South Africa joint venture company.

By the end of 2017 the Chevrolet brand will be removed from both India and South Africa.

GM said it expects to save $100 million per year thanks to these moves, but cautions it will take on approximately a $500 million charge associate with the moves. Of the $500 million, about $200 million will be cash.





 

About Nick Saporito

AutoVerdict Senior Editor Nick Saporito began writing about cars at age 13. Nick ran a couple of automotive enthusiast sites for several years, before taking some time off to focus on his career and education. By day he's a marketing executive in the telecom world and by night he hangs out here at AV. You'll find him focusing on tech, design and the industry's future.
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  1. Andrew_L
    I thought India was a good market to be in with small cars.
    Tone
    It seems as though changes in technology are making GM reconsider what growth might look like. The famous example is telephones. A lot of emerging markets never built out a complete reliable wired phone network, but their adoption of cellular was high and fast.

    If GM thinks that services of some kind are more likely to take hold in these markets, it makes more sense to cover them with Lyft. Or GM doesn't see growth for itself in the near term in these markets and is conserving cash to invest in areas it hopes will grow (BEVs, China)

    GM seems focused on return on investment rather than world dominance. That strikes me as a much better approach to running a company.
    arutherford
    GM is cutting too much and that will limit their future growth.
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