GM to stop selling vehicles in India, job cuts likely 

Forget bringing in new investments and jobs into India, multinationals which have already invested in India are reversing their decisions and slashing jobs too. American auto major General Motors (GM) on Thursday decided to stop selling its vehicles in India.

This follows GM’s decision last month to stop production at its Halol plant in Gujarat, which it had started as a joint venture in the 1990s and, in which it acquired a 100% stake in 1999. The Halol unit, which had a total annual manufacturing capacity of 1.1 lakh units annually, was originally planned to be shut by mid-2016. The plant used to employ about 1,100 workers.

The company is expected to give the pink slip to hundreds of its employees.

GM will now focus on exporting vehicles from its manufacturing plant in Talegaon in Maharashtra, which has a capacity to manufacture 1,30,000 vehicles a year. Some employees from the Halol plant were moved to the Talegaon unit.

The decision follows a comprehensive review of future product plans for GM India and, is part of a series of actions taken by General Motors to address the performance of its operations worldwide, the company said in a statement. It has also exited from four other international markets, including Russia and Europe.

GM’s Executive Vice-President and President of GM International Stefan Jacoby said that after exploring many options, the company had determined that the increased investment originally planned for India would not deliver the returns of other significant global opportunities.

GM sales in India were down nearly 21% in 2016-17 to 25,823 units. Its production, however, grew about 16% to 83,368 units, most of which were exported.

In 2015, GM had announced plans to invest $1 billion to enhance manufacturing operations and roll out 10 locally produced models in India, while deciding to stop production at its first plant in Halol in Gujarat.

However, struggling to make a turnaround in India, the company put on hold the plan and undertook a full review of its future product portfolio here.

The company informed employees of General Motors India about the decision. It, however, did not disclose how many would be affected by the development. Sources, however, said the decision would affect a minimum of 200 employees.

GM has been in talks with China's SAIC Motor Corporation to sell the Halol plant. A term sheet was signed a few months back to evaluate a possible deal, but the Chinese firm stated that a final takeover would be subject to government approvals, settlement of labour and all other pending issues by the American auto major.

With PTI inputs