Looking forward to a new Chevrolet model? Think Again!

General Motors announced an investment of $ 1 billion in India by 2016, however, dipping sales in India hasn't worked in the company's favour and along with halting investments in new models, they may sell the Halol production facility

By:January 23, 2017 12:30 PM
General Motors is putting all its investments and new model introduction on hold in IndiaGeneral Motors is putting all its investments and new model introduction on hold in India

Chevrolet is a brand synonymous with large American vehicles that have the flexibility of being a people mover or a load carrier depending on a car buyers’ requirement. In developing countries like India, Marry Barra, CEO, General Motors in 2015 stated an investment of $ 1 billion and claimed to produce 10 locally produced models that would also be exported to other developing countries as well as sold in India. However, with considerable losses every year by the Indian division, the parent company is reconsidering about its investment and has currently put it on hold (Net loss of Rs 1,003.39 crore in 2014-15 and Rs 3,812 crore in 2015-16). A news report by PTI states that the company is conducting a full review of their future product portfolio and has put a hold on the future investment until they firm up their model strategy and the way forward for India.

Currently, the company has a rather weak three percent share that was expected to improve over time with the introduction of the Beat Activ Concept’s production model and a few others in the pipeline. Although its model range in India currently has the Chevrolet Beat, Sail, Sail U-VA, Cruse Enjoy and Trailblazer, the last being the latest introduction in the country at a hefty price tag of Rs 27 lakh, ex-showroom Delhi, on the MY2015 (Manufacture Year – 2015) models, there hasn’t been much contribution of sales number from most of its cars.

After the introduction of the new Ford Endeavour, the company slashed the price of Trailblazers manufactured in the said year by Rs 3 lakh. The high price of the SUV as it is an import and the stiff competition in its segment wherein they are offering more powertrain options as well as a better feature list, has put the Trailblazer in a tight situation (in terms of sales). Throughout 2016, the Trailblazer sold a total of 88 units with 27 units sold in December 2016, which happens to be the model’s highest sales number for the aforementioned year. The new Toyota Fortuner sold over 1,700 units in December 2016 itself which is currently the strongest figure in its segment.

In addition to a production model based on the Activ Concept, Chevrolet also planned to introduce their first compact sedan, the Essentia in India. However, due to the diminutive sales of the brand in most categories, the carmaker is considering selling its Halol production facility to China’s SAIC Motor Corporation for the time being as a part of their consolidation process for India. That said, it can be expected that the company’s comeback in the country could be better, however, with a proper strategy, consumer-oriented vehicles and acceptable aftersales, Chevrolet could see better days in India.

Whatever comeback strategy the company plans, one thing is clear that the company should not rest its hopes on models from SAIC. In the past SAIC-sourced models haven’t done well in India due to various reasons. One of them includes dated designs, which doesn’t go down well with the consumers. Indian consumers are well-informed in present times and they prefer value over sticker price and hence would pay more for a better-looking and well-equipped vehicle than buying a cheaper car. SAIC cars in India have historically been short on features and technology too, something Indian consumers do not appreciate at all. If Chevrolet plans its turnaround on cars such as the Essentia and other SAIC models, the path is clearly going to be rough. The company needs designs that connect with the youth as by 2021 more than 65 % of our population will be aged under 30 years and the one can’t expect a dynamic consumer group to go in for dated designs and technologies.

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