"The business environment is very challenging. No doubt about it. Many other OEMS are also under stress in the current market situation where volumes are under stress," General Motors India President & Managing Director Arvind Saxena said.
Saxena, who had joined the company earlier this year from Volkswagen India, further said: "And because of volumes, everything else, financial viability and future sustainability are also under stress."
Highlighting the immediate task in hand, Saxena said: "We need products, we need a clear cut strategy to be here in the market. That's what we are trying to work out today. The immediate plan is to work a long term sustainable business for GM here. We are losing money, we would like to contain that and look at a plan on how do we make it more sustainable for us."
While he declined to comment on the financials of the company, GM India has reportedly accumulated a loss of Rs 2,740 crore so far in its nearly two decades of existence in India.
Saxena said the focus is on how to optimise both on the revenue side and the cost side and create a momentum in the organisation.
Asserting that GM has no plans to wind up from India, he said: "There is a clear mandate from our senior global leadership that we have very strong view that India is a very important market in the GM overall plan. While volume is still small right now but going forward, we do expect and recognise the future potential of this market."
He further said: "You cannot afford to exit a market (India), which is slated to be the number three market in the world. You cannot service this market by importing from outside...So, we have been here for many years and we will be here for many more years...The key is that we have to find answers and how to sustain our business."
Saxena also said with India predominantly being a small car market at present, "making money is very challenging and not very easy" but as the market evolves to the next level of cars, it would become more sustainable.
Elaborating on the steps taken up by the company to overcome the challenges, he said: "The first is exports. We are now looking at exports for the first time from India. That's an activity that will help us financially and one of more volume, which is very critical in our business."
The company will start exporting the left hand drive version of its compact car Chevrolet Beat to Chile in the second half of this year.
Bullish about the step, Saxena said the global leadership of GM has also endorsed it and the company is exploring more international markets, which might be in more countries in South America and Africa.
"We have a huge market for smaller cars and it makes a good case for us. The overall cost efficiency in India is far better than any other part of the world, which make this proposition attractive," Saxena said.
The other area of focus is on efficiency in every aspect of the company's business, he said.
"We have rectified many areas, where we have made significant progress. These include rationalising products, variants, looking at efficiency in terms of our buying, purchasing, manufacturing.
"We have started making good breakthroughs. If we continue the same way for a couple years, we should be in a much better position," Saxena said.
When asked if these steps would mean delay in product launches, he replied in the negative.
"There is no delay in planned product launches. We are still in the process of bringing, exploring new products. We will try and look at products which are far more relevant for this market.
"We are also continuously looking at which segments are emerging, how customer preferences are changing. We are very strongly working on it," he said without disclosing the company's launch programmes.
The third key aspect, Saxena said, on which the company is currently focussing is improving after-sales service and improve the overall ownership experience. The company has defined norms to address the issue and is in the process of rolling it out to each dealership.