1. GM to invest $1 bn in India operations; to shut Gujarat plant

GM to invest $1 bn in India operations; to shut Gujarat plant

A day after US auto giant General Motors announced $5 billion investment to boost presence in emerging markets like India, Brazil, China and Mexico, the company on Wednesday said that a fifth of the amount, or $1 billion, will be invested in its India operations.

By: | New Delhi | Published: July 30, 2015 3:25 AM

A day after US auto giant General Motors announced $5 billion investment to boost presence in emerging markets like India, Brazil, China and Mexico, the company on Wednesday said that a fifth of the amount, or $1 billion, will be invested in its India operations.

“GM cannot remain a global leader without making a serious investment towards expanding presence in growth markets like India,” global CEO Mary Barra said at a press briefing. She also said the new investment will result in creation of 12,000 jobs through the company and its suppliers. “The Indian passenger car market is expected to grow to 8 million units by 2025. We want to be a part of this growth,” she added.

However, despite the major investment, total production capacity of the company in India is set to be reduced as it has also decided to shut its plant at Halol in Gujarat by the second half of 2016. 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. The company sells its products under the Chevrolet brand in India and has a market share of 1.8%, with a sale of close to 57,000 passenger cars in 2014.

The company also planned to export up to 30% of its production in Talegaon in the next decade, GM India president and MD Arvind Saxena said. He said the company is likely to export 19,000 units in the current year and aims to double that in a few years to 40,000 units. On the large number of recalls it has faced in India, Saxena said: “We know we have not done a very good job. We are committed to fixing it”.

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