GM India to cease domestic sales, focus only on exports

General Motors to stop selling cars in India but to keep manufacturing centre

General Motors (NYSE:GM) announces a series of worldwide restructuring moves which it expects to lead to ~$100M in annual savings.

American auto manufacturer General Motors (GM) on Thursday said that it has chose to end selling of vehicles in India because there was no improvement in its fortunes in the country after a struggle of more than two decades for making a mark in the Indian market.

While GM will continue building products in India to sell in other countries, its decision to pull out of the market in the world's second-most populous country reflects a wider recalculation of where it should be laying bets. About $200 million of the planned charge will be cash expense. GM is making a number of other changes to its global business as well.

GM also is the second automaker this week to announce restructuring actions amid declining US industry sales, pressure from shareholders to shore up stock prices and shareholder dividends and the growing need to invest heavily to develop autonomous vehicles. "We stand with our members during this hard time". "Are we spending time pursuing opportunities ... or all of our time fixing problems?"

GM, like its Detroit rival Ford Motor Co, has found it increasingly expensive to compete in emerging markets outside of China. At the same time, the auto maker is investing about $600 million a year on self-driving vehicle engineering, car-sharing ventures and development aimed at helping the 109-year-old auto maker compete with Silicon Valley tech giants looking to edge in on the vehicle business. But GM isn't pulling out of all of its Indian operations entirely. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands. The company now employs about 2,500 workers there.

GM said it would honour all existing catalytic converter export contracts in South Africa.

"In India, our exports have tripled over the past year, and this will remain our focus going forward", he said.

"This presents a big opportunity for us to grow in South Africa". 'After a thorough assessment of our South African operations, we believe it is best for Isuzu to integrate our light commercial vehicle manufacturing operations into its African business, ' said Jacoby. GM International in an earlier press release said it will "streamline its regional headquarters office in Singapore", meaning it will reduce the number of employees at its headquarters in that region. GM India President and Managing Director Kaher Kazem said at a conference call that the development will impact 400 employees associated with sales and after sales service. Just a few years ago most automotive analysts were predicting that the "BRIC" countries - Brazil, Russia, India and China - would be engines of growth for global automakers for years to come.

Despite the restructuring moves, including Barra's decision in March to sell loss-making European operations to French rival Peugeot SA, GM's share price has been stuck in a range close around $33 where it went public in 2010 following a government-funded bankruptcy. We are expecting to meet with the management of GM soon to discuss these matters.

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