While it continues to struggle to sell its vehicles in India, General Motors India managed to narrow its losses to Rs 1033.39 crore during the financial year 2014-15 against a net loss of Rs 3812.46 crore in 2013-14 on the back of cutting expenditure, lower input cost and interest payment. Though the company’s total income declined 33.2% to Rs 2,262.79 crore during the period, its interest outgo decreased 68% to R37.04 crore, data from Registrar of Companies showed.
Input costs declined 27% to Rs 2,245.24 crore while total expenditure was down 29.43% at R3,316.15 crore
The company sells its products under the Chevrolet brand in India and had a market share of 1.97% in 2014-15, which has further declined to 1.21% in the April-October period and 1.02% in October this year. The company sold 51,839 passenger vehicles in 2014-15, a steep fall of 35.91% compared to its performance in the previous year.
After 20 years of presence in India, the company’s accumulated losses stood at R6552.94 crore at the beginning of the year 2014-15. GM India has now planned to make India an export hub for global markets. The company exported 984 units in 2014 to Chile and is targeting exports of 19,000 units this year.
The company has decided to cease production at its Halol facility in Gujarat by June 2016. The manufacturing unit located at Halol since its inception has proved to be a severe strain on its finances. It has decided to consolidate all manufacturing activities into one site, its Talegaon plant in Pune.
General Motors Company, the parent company of GM India has also announced an investment $1 billion in India and launch of 10 new models from the Chevrolet family in the next five years to turnaround its fortune in the country.
During a visit to India in July this year, General Motors global CEO Mary Barra said that the new investment will result in creation of 12,000 jobs through the company and its suppliers.
However, despite the major investment, total production capacity of the company in India is set to be reduced as it has decided to shut its plant in Gujarat.
The Gujarat plant has a capacity of rolling out 1,27,000 units annually. On the other hand, the company’s Talegaon plant in Maharashtra will see an increase in production capacity from 1,60,000 units to 2,20,000 units in a few years.
In effect the total production capacity of the company will come down from around 2,80,000 units currently to 2,20,000 units after the restructuring in India and investment of $1 billion.