Plus   Neg

GM Quits India, South Africa


Automaker General Motors Co. (GM) announced a restructuring of its international operations to focus its capital and resources on business opportunities as well as markets expected to deliver higher returns. GM's Chevrolet brand will be phased out of India and South Africa by the end of 2017.

GM said it will focus its India manufacturing operations on producing vehicles for export only and will transition GM South Africa manufacturing to Isuzu Motors Ltd.

GM's manufacturing facility at Talegaon in India will continue as an export hub for Mexico and Central as well as South American markets. The company noted that its exports from India have tripled over the past year and will remain its focus going forward.

GM continues to struggle in India as sales have declined for the past six years after peaking in financial year 2011/12. It has failed to make any profit in its two decades of operations in the country and currently has less than 1 percent market share in the passenger car segment.

In South Africa, Isuzu Motors will acquire GM's light commercial vehicle manufacturing. GM will cease manufacturing and sales of Chevrolet in the domestic market.

In East Africa, Isuzu agreed in February to purchase GM's 57.7 percent shareholding in GM East Africa, assuming management control. GM will withdraw sales of the Chevrolet brand from the East Africa market.

GM Chairman and CEO Mary Barra said, "We are committed to deploying capital to higher return initiatives that will enable us to lead in our core business and in the future of personal mobility. Globally, we are now in the right markets to drive profitability, strengthen our business performance and capitalize on growth opportunities for the long term."

GM International will streamline its regional headquarters office in Singapore, which will retain responsibility for strategic oversight of the remaining regional business and markets, including Australia and New Zealand, India, Korea and Southeast Asia.

As a result of these restructuring actions, GM expects to realize annual savings of about $100 million and also incur a charge of approximately $500 million in the second quarter of 2017.

The charge will be treated as special and excluded from the company's EBIT-adjusted results. GM noted that about $200 million of the special charge will be cash expenses.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Follow RTT