GM Ends South African Production After 90 Years With Isuzu Deal

GM Ends South African Production After 90 Years With Isuzu Deal

GM Ends South African Production After 90 Years With Isuzu Deal

Chevrolet, the only brand from GM sold in India will exit the market by end of this year. Since then, auto sales overall in India have slumped, and GM has failed to gain traction against incumbents such as Maruti Suzuki India Ltd. GM will cease sales of Chevrolet vehicles in the domestic market by the end of 2017.

"We will support our affected customers, employees, dealers and suppliers", Kazem said.

Even though GM is shutting down its India operations, the company plans to use its India manufacturing plant to continue its exports to Asian and South American markets. Rising exports in the last few years (it exported 70,969 units in 2016-17 compared to just 4 units in 2013-14) has given it an opportunity to convert its Talegaon plant in Maharashtra into an export hub.

India president and managing director Kaher Kazem said,"I can now confirm that GM India is making significant changes". On April 28, the company had shut down its Halol plant in Gujarat, preferring to continue manufacturing operations at the Talegaon plant in Pune.

Like many other multinational companies, GM too read the Indian market wrong in the beginning. It had been selling Chevrolets since 1918 and even opened a factory near Bombay in 1928. Chevrolet is the sixth most exported passenger vehicle out of India. It has centered most of its emerging-markets investment on China and Brazil.

GM plans to continue to work on the $5 billion GEM programme, which GM is developing with SAIC Motor.

GM has explored many options in India and has chose to withdraw all investments that were planned for India as the company believes that the investments will not generate profits.

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"Globally, we are now in the right markets to drive profitability, strengthen our business performance and capitalize on growth opportunities for the long term".

"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", Stefan Jacoby, GM Executive Vice-President and President of GM International, said in a statement. "Chevrolet India is committed to maintain a service network across key locations in India with staff trained to take care of all the needs of your Chevrolet for maintenance and fix".

Sources said the move would impact about 8 per cent of the company's 6,000 jobs in India.

The National Union of Metal Workers of South Africa (NUMSA) says it will be consulting lawyers regarding General Motors' (GM) announcement to pull its operations out of South Africa.

General Motors has been in South Africa for 13 years, where it launched multiple brands in the country - Chevrolet, Hummer, and Cadillac - and produced Opel and Chevrolet vehicles. The company pulled out of Russian Federation a few years ago.

Almost three million passenger vehicles were sold in India a year ago, according to industry data, and the country is projected to overtake Japan as the world's third largest auto market by 2020.

The decision to quit the Indian market comes as a result of continuously falling sales figures and rising operational losses.

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