[blackwasp]

General Motors (GM) will shut down its last factory in India a day before Christmas, the fallout of raging tensions between India and China, reports TOI. The American car major wanted to sell its factory in Maharashtra to Great Wall Motors, China's largest SUV maker, for over Rs 2,000 crore, but India did not clear the deal.

Per sources, there are 1,800 salaried and hourly employees at the Talegaon plant, which was being used to export cars, primarily the Chevrolet Beat, to Mexico. This has now stopped, forcing the company to shut down the factory with no deal in place with Great Wall.

It is understood that in the absence of a fund flow from Great Wall Motors, GM will have to fund the closure liabilities on its own. It will need to pay for the severance payout to workers, while also requiring an approval from the Maharashtra government for layoffs.

The deal between GM and Great Wall was announced in January this year when they signed a binding term sheet, and this was to close in the second half of the year. However, in June, after the killing of 20 Indian soldiers in Ladakh in violent clashes with Chinese troops, the Maharashtra government said it was putting the GM-Great Wall and two other deals (worth Rs 5,000 crore) on hold following discussions with the Centre and the external affairs ministry.

With the closure of the Talegaon plant, GM will bring the curtains down on its India operations which began in 1996. It had already sold its other Indian factory (at Halol, Gujarat) to China's SAIC in 2017, which is now being used by MG Motors.

Source

[V.Narayan]

I'd say it is sad 1800 Indians will lose their jobs. That is the really sad part. Other than that GM should go. They do not have the staying power or a vision for the Indian market.

[Dry Ice]

A mere formality?

They are losing ground on their home turf as well - https://www.ft.com/content/72266f11-...3-806176b8c7b4 where will they run from there? China?

[VaibhaoT]

Really sad for those 1800 worker and their family. State government should have looked beyond politics in these difficult times.

On different note, photo in the article brings lovely memories.
Chevrolet Beat was my first car. Car was really fun to drive and I totally enjoyed my time with her. I had to sell, because after sales service was getting painful. Almost every part was imported from south Asian country and it used to be very costly. Part availability was another pain in maintenance. I sold my car just 3 months before winding up of their sales.
I wish GM would have survived.

[RSR]

It's very sad it had to come to this. Within just a couple of days, we have news of two car manufacturing facilities being shut down in India and workers being asked to go - the Honda plant in Noida and the GM plant in Talegaon.

Despite my barely-concealable hatred for the PRC's regime, I've been advocating that both, the government of Maharashtra and the government of India take a pragmatic and holistic stand on this issue, and allow Great Wall Motors (which is privately-owned, not state-run) to purchase the Talegaon plant from GM and start operations. News of two large automobile factories getting shut down one after the other does not bode well for the Indian manufacturing industry.

Many people believe Halol and Talegaon are GM's first factories in India. This is incorrect.

American car companies like Ford, General Motors and Graham-Paige, and the British Wolseley all had assembly plants in pre-1947 India!

General Motors, in particular, was very successful (source) in pre-1947 India:

General Motors (GM), on the other hand, had a much more successful run in India. Though its assembly facility at Sewri, neighbouring the Bombay Port, was inaugurated in December 1928, series assembly began in earnest in 1929, with several of the many GM brands, including Buick, Chevrolet, Oakland, Oldsmobile and Pontiac, rolling off the lines simultaneously.

Trucks, with the GM branding, were also assembled. By the time GM overtook Ford worldwide (in 1931), the Indian market, too, was contributing to the GM’s global lead, and this was reflected by the increasing popularity of Chevrolets and Buicks in the sub-continent.

Thanks to the disastrous economic & industrial policies adopted after 1950 (when the notorious license raj era was being put in place) and the ill-advised decision by the powers-that-be to make India a part of the Third World in the post World War II global scenario, these successful car & truck assembly plants were forced to shut down, and their parent companies were forced to leave India.

[GTO]

Amazing how auto CEOs lie with a straight face.

Mary Barra visited India and announced a fresh $1 billion investment, just a year before GM India shut down.

They then announced that GM will continue to run their factory here. I had mentioned it back then = no way in hell! It was just the American way of delivering slow poison.

[tirumalavoleti]

Sad closure for GM india. They went Maruti route of affordable cars with out matching the service network.

India is a complex territory where Maruti had laid down market criteria which needs determination to override for global players.

Hopefully some player matches their service network in the same cost segment

[landcruiser123]

GM never made good small cars. Their marriage with Daewoo was an ultimate flop. I believe this move is pretty late considering how GM has been bleeding money in India.

Compared to that, Ford has been reasonably successful in the small car business in Europe. In the recent past, Ford has overtaken GM in the truck business in the USA too. Tough times ahead for GM, but EVs look promising.

[v1p3r]

Originally Posted by V.Narayan

I'd say it is sad 1800 Indians will lose their jobs. That is the really sad part. Other than that GM should go. They do not have the staying power or a vision for the Indian market.

I think this is stupidity, precisely because 1800 Indians will lose their jobs for no fault of theirs. GM can stuff it - I can't remember the last time a GM car was interesting (Camaro?) or well-made - and go back to USG handouts.

Originally Posted by GTO

Amazing how auto CEOs lie with a straight face.

What does she care? This market means nothing to her. Come, give some speech, press some flesh, and fly back.

[Hayek]

Can’t be helped. The fact is that the Indian market is extraordinarily unattractive for any global auto manufacturer - with ever changing rules, unique tax structures, lack of emphasis on safety et al.

The recent Make in India regulations which ignore the Principle of Comparative advantage only make things worse. When the auto industry was on an IC engine fueled drive to globalise, losses in the hope of future profits may have been acceptable. With the death of the IC engine being almost certain in 20 if not 15 years, companies now have to invest in future technologies - and can happily ignore India.

Will not be surprised if Renault, Nissan, Jeep, VW et al follow suit after one last throw of the dice.

[GrammarNazi]

Originally Posted by Hayek

Can’t be helped. The fact is that the Indian market is extraordinarily unattractive for any global auto manufacturer

- with ever changing rules, unique tax structures,

We have barely a few rules & very few that actually effectively protect consumers.

lack of emphasis on safety et al.

So? Car brands only seem to make use of this to profit from it, by a compromised design, or, say using High strength steel which costs much lower than Ultra HSS.

The recent Make in India regulations which ignore the Principle of Comparative advantage only make things worse. When the auto industry was on an IC engine fueled drive to globalise, losses in the hope of future profits may have been acceptable. With the death of the IC engine being almost certain in 20 if not 15 years, companies now have to invest in future technologies - and can happily ignore India.

Will not be surprised if Renault, Nissan, Jeep, VW et al follow suit after one last throw of the dice.

Did Renault even put an honest effort ? They launched Duster at a fair price & then incrementally increased them without any improvement in the product. Not just interiors, but also with the mechanical aspects. Which other country will allow a car with regular injector failures to be sold to the masses without regulatory intervention ? And then they launched Captur, which is another story about its mis-adventures. Its only eventually that they came with Triber. Nissans' Magnite is a product wherein they seem to've really put some effort & thought into.

Jeep seems to have no interest in keeping costs competitive. When other products in the category are selling at 15-20% lower price than Jeep itself (Harrier/Hector...). Who will consider the Grand Cherokee when Mahindra offers a similar product with impressive safety ratings at a much lower price ?

When Kia can reach operating profit within 15 months of launch, during a pandemic year, it can only be brand shortcomings for these other companies to have been unable to meet peoples expectations.

Past 2-3 years I do agree it is been nothing great, but EoD I don't imagine the India story would be as gloomy as made often out by rating agencies & media. Lets see.

[Sebring]

Even a layman could tell GM's products were wrong for India. There was a flicker of hope with the Beat, but murmurs of engine issues were afloat. That did it in. Indians crazed for the SUV and they should have brought in the mini-SUV first, like FORD did - given their experience. That would have saved GM. Even now I feel they should put in renewed efforts to enter our growing market, and turn the clock back

[landcruiser123]

Originally Posted by v1p3r

What does she care?

OTOH, I think the board at Detroit would have given her a pat on the back as she cut a loss-making arm of GM India.

Originally Posted by Hayek

Can’t be helped. The fact is that the Indian market is extraordinarily unattractive for any global auto manufacturer

True, India does have some quirky laws. But GM doesn't have a small car portfolio anywhere in the world and their marriage with Daewoo led to disaster after disaster.

OTOH, Ford has pretty competent small-car platforms. The Figo(Ka), Fiesta, Focus, Ecosport, Fusion(former hatch & sedan), Mondeo, Kuga etc are pretty well-accepted cars (barring transmission issues with some models) throughout the EU, Australia, Africa etc. Sure, Ford India isn't as successful as Hyundai India, but they aren't a complete disaster GM has been.

[windrider]

Chevrolet are the engineers of their own downfall. They hardly had any models that sold other than the beat, Tavera and cruze and they didn't bring in any major updates and people simply lost interest in this brand. The Captiva and enjoy were dead on arrival. The emissions scandal certainly didn't help. Dealerships started closing down one by one and once that starts, there is no coming back. Chevy are going the EV route and maybe one day they will be back. Fingers crossed.

[db DrivE]

Good riddance.
They have destroyed themselves by not giving the Indian consumers and their tastes what they deserved.
Once had beautiful cars and then stopped down to the enjoy,sail level.

What is the point of having their factory here when they cannot serve us?
I do feel bad for those 1800 employees but eventually they will find jobs.
Hope the facility is made good use of by a better player.

And this gives a serious message to all those manufacturers who do not respect the local tastes and preferences.
Many to follow I believe.