General Motors continues to restructure its international operations as the company has announced plans to phase out the Chevrolet brand in India and South Africa.
Besides phasing out Chevrolet, GM India’s manufacturing operations will be refocused towards producing vehicles exclusively for export. Meanwhile, GM South Africa’s manufacturing operations will be transferred to Isuzu Motors.
The Chevrolet brand will be phased out of both continues by the end of the year and GM says the decision is the result of a desire to “focus its capital and resources on business opportunities expected to deliver higher returns.”
In a statement, GM CEO Mary Barra said “As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company.” She went on to say “Globally, we are now in the right markets to drive profitability, strengthen our business performance and capitalize on growth opportunities for the long term. We will continue to optimize our operations market by market to further improve our competitiveness and cost base.”
GM International President Stefan Jacoby expanded on Barra’s comments by revealing the company determined the amount of investment required to offer an extensive product lineup in India wouldn’t lead to long-term profitability. However, exports from India have tripled over the past year so the company decided to keep its Talegaon manufacturing plant and focus on the export market.
The situation is similar in South Africa as Jacoby said “We determined that continued or increased investment in manufacturing in South Africa would not provide GM the expected returns of other global investment opportunities.”
Reuters reports GM sold a combined total of 49,000 vehicles in India and South Africa last year. Given the low sales, it’s not hard to see why the company decided to exit the markets and save around $100 million annually.
H/T to Jurie Cronje