Over the last several months, General Motors’ Chevrolet brand has lost 20 percent of its dealer network in India, with the amount of Chevy retail outlets dropped from 280 to 223. The reason for the rapid drop in retail outlets appears to be a similarly-hurried decline in vehicle sales, with most owners either scaling down operations or surrendering their franchises altogether.
GM solely markets the Chevrolet brand in India, and sales of the Bow Tie brand have dropped 33 percent on a year-over-year basis. In the first six months of 2015, Chevy has been reported to have sold a cumulative 19,299 new vehicles across India. Spreading that number evenly across the 223 outlets results in 86 cars sold by each dealership, or roughly 15 cars per month per dealership.
GM India Business Strategy
The automaker has stated that, going forward, its business strategy in the Indian market will be to:
- Focus on the existing set of franchises rather than expanding the network
- Invest Rs 6,400 crore ($1 billion USD) to roll out 10 new cars in the Indian market, as announced in July 2015
- Halt production at its plant in the city of Halol, thereby consolidating manufacturing operations to the Talegaon plant. It will be here that GM plans to produce the 10 new products slated to launch in the coming years.
“In order to create a sustainable business environment both for us and our dealers, we have taken some important steps in the past 18 months”, said a spokesperson from GM India. “From the dealer’s point of view, we have increased the dealer margins to industry-best standards. Our dealers are confident that in coming years, with 10 new product launches, they will be able to create not only a sustainable but a profitable business.” He further added “Going forward, we are focused on the long term fundamentals of the Indian business, as well as the financial health of our dealers.”
In September of this year, the automaker announced plans to become profitable in India within five years.
Over the course of 2015, GM has also revamped its executive leadership team in India, with the following appointments:
- Arvind Saxena – President and Managing Director
- Kasher Kazem – Chief Operations Officer
- Hardeep Singh Brar – Vice President Of Sales
- Jack Uppal — Vice President Of Marketing And Customer Experience