General Motors to invest $1 billion in India, double market share by 2020

General Motors Co will invest $1 billion in the next few years to turn operations in India into a new global export hub aimed at boosting sales in fast-growing emerging markets, top executives said on Wednesday.

The investment is part of GM’s plan to invest $5 billion over several years to develop a global family of Chevrolet vehicles with Shanghai Automotive Industry Corp ( SAIC), the state-owned Chinese automaker that is GM’s primary partner in China.

“GM cannot remain a global leader without making a serious investment towards expanding our presence in growth markets like India,” GM Chief Executive Officer Mary Barra said at a briefing in New Delhi.

India’s automobile market has been sluggish for the past few years, with annual sales of less than 3 million cars. But by 2020 analysts expect India to become the world’s third-largest passenger vehicle market after China and the United States.

GM will launch 10 new domestically manufactured vehicles in India over the next five years in a push to double its market share in the country by 2020, Stefan Jacoby, GM’s chief of international operations, told a news conference. GM sold 56,700 vehicles in India in 2014 and had a market share of 1.8 percent.

With India dominated by Japanese and Korean automakers like Suzuki Motor Corp and Hyundai Motor Co, Western firms like GM, Ford Motor Co and Volkswagen AG have found it tough to ramp up domestic sales.

EXPORT HUB

GM’s decision to make India an export base mirrors similar moves by Ford and VW, which are ramping up exports from the country to take advantage of low labour costs and profit from economies of scale.

“With this investment we plan to tap India’s potential as a market and as a low-cost manufacturing base for the future,” Jacoby told Reuters in an interview.

The move is also seen as likely to take some of the strain off GM’s South Korea operation. The automaker’s operation there has been a low-cost export hub for years, producing close to a fifth of its global output, but has been overshadowed by rising labour costs in recent years.

However, the Indian expansion doesn’t herald a gradual move away from GM’s use of South Korea as an export base, Jacoby said.

He said South Korea will continue to be a manufacturing and export base for automobiles designed for mature and developed markets such as the United States and Europe, while India will likely be harnessed as an export base for emerging markets.

Source: Economic Times

Advertisements

3 Responses to “General Motors to invest $1 billion in India, double market share by 2020”

  1. Jeff Mazzini Says:

    Fantastic news and shows the worlds biggest companies willing to invest into countries that has a great leader and team making things happen . So proud of what is happening today in India and proud to be an OCI.

  2. Jeff Mazzini Says:

    Reblogged this on AAMC Training's Blog.

  3. ceruleconsulting Says:

    Well said!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: