India May Gradually Replace South Korea As A GM Manufacturing Hub

GM is targeting at least 5 percent market share in India within the next ten years, a market the automaker believes will overtake Japan as the world’s third biggest. By 2025, India is expected to reach annual sales of 8 million vehicles.

The Detroit company is currently losing money in India but plans to launch an array of new products to revive sales and to make India a new global manufacturing and export hub for its products. The move is due both to the potential of the Indian market and to increasing labor costs in South Korea, where GM has a strong manufacturing presence.

According to Reuters, later this year, GM will announce a strategic plan which includes the launch of newly-designed subcompact cars in India. The country’s auto market has been steady for the past few years, with annual sales of just above 3 million vehicles, but GM’s chief of international operations Stefan Jacoby believes things will change.

“India has gained back confidence. We’re pretty optimistic. We see growth potential in India, and believe there’s a good opportunity for the Chevrolet brand to take share in this market. There’s more prosperity and buying power. Vehicles selling for $5,000-$8,000 will more and more disappear in India,” Jacoby said.

In recent years, GM has restructured its global manufacturing operations, shutting down plants in Australia and Indonesia and scaling down operations in Thailand. According to analysts, India will partially replace South Korea as GM’s key Asian export base.

That’s because labor costs in South Korea have risen by nearly half in just five years, making it less competitive. India, on the other hand, has relatively low labor costs.

Note: India-spec Chevrolet Sail pictured

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