Although it will stop selling cars in the country, GM will continue to operate its tech centre in Bengaluru while its Talegaon plant in Maharashtra will be converted into an export-only factory.
"They acted unilaterally and did not inform the union of this decision", Jim said. As a result of these actions, GM expects to realize annual savings of approximately $100 million and plans to take a charge of approximately $500 million in the second quarter of 2017.
GM's operations in other emerging markets have also been affected.
Stefan Jacoby, GM executive vice-president and president of GM International, said, "We explored many options, but determined the increased investment originally planned for India would not deliver the returns of other significant global opportunities". 'Globally, we are now in the right markets to drive profitability, strengthen our business performance and capitalize on growth opportunities for the long term.
India has just announced that they will stop local sales of their cars by the end of this year. Its production, however, grew about 16 per cent to 83,368 units most of which were exported.
GM said Japanese manufacturer Isuzu Motors would acquire GM's plant in Port Elizabeth, in the Eastern Cape, combining the operation with its existing Isuzu Trucks South Africa (ITSA) operations, in which it owned the majority stake, to form a single entity called Isuzu Motors South Africa (IMSA). The country has a population of 1.3 billion and is set to overtake Japan as the third-largest market in the world within the next ten years. Although GM is notching record profits on strong sales in the USA and China, Mr. Ammann said the company still operates "in a world of finite resources".
To be successful in India, Jacoby said one option for GM was to "give up on implementing global platform and vehicle standards".
GM India informed employees of the decision today. At that time, around $1 billion United States dollars was invested into both the Halol and Talegaon plants. However, there will be around 400 layoffs and the company will give its employees a severance package.
"We are talking to our dealerships on the transition process and they will help in continuing to provide after sales service to customers".
GM had in 2006 withdrew the Opel brand from India and replaced it with Chevrolet. The plant will produce vehicles exclusively for export, shipping cars to Mexico as well as Central and South America. The Halol plant had about 1100 employees.
In April, GM stopped production at its first Indian plant at Halol, Gujarat, as part of the consolidation of manufacturing operations in the country.
Can I sell my vehicle back to my dealer?
General Motors India has said on Friday its parent General Motors would collaborate with Shanghai Automotive Industry Corporation to develop and manufacture commercial vehicles and.
Almost three million passenger vehicles were sold in India a year ago, according to industry data, and the country is projected to overtake Japan as the world's third largest auto market by 2020. It was discontinued in 1954. In 2016, GM delivered more than 3.8 million vehicles in China.
What followed thereafter was a series of wrong decisions on part of GM and and its surprisingly consistent ability to not understand the Indian market.
GM's willingness to back out of hard markets is a radical departure for an automaker that for years was focused on maintaining its position as one of the world's largest automakers.