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General Motors Eyes India As Last Automotive Frontier

As operating costs in South Korea climb, General Motors has been facing an issue staring it in the face. South Korea currently produces more than a few offerings from the GM portfolio, manufacturing over 600,000 cars in 2014, and has become a key export hub for the company in recent years.

In a report from Reuters, that will change dramatically within the next ten years. By 2025, it is estimated South Korean production will be scaled back to merely 325,000 cars a year. The reason for that shift? India.

“India may be the last big white sheet of paper in the automotive industry,” Stefan Jacoby, GM’s chief of international operations, told Reuters in a recent interview. GM has consistently lost money in the country, despite operating in the country for 18 years. But a new product blitz is under way, and GM has a plan to turn India into its next big export hub for the Asian-Pacific market.

India’s auto market has been steady near 3 million cars annually every year, but a shift in consumer preferences is occurring. Consumers are no longer eyeing up budget economy cars, rather, sub-compact vehicles are becoming a new normal in the country. With consumer confidence rallied by Prime Minister Narendra Modi, Asia’s third largest economy is on the brink of an automotive boom time.

“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,” said Jacoby.

GM says it is targeting 400,000 vehicles sold in India by 2025, an ambitious goal considering it sold 57,600 last year. But the introduction of the Chevrolet Trailblazer and Chevrolet Spin will usher in a new era of Chevrolet for the country.

While South Korea’s manufacturing base is safe for now, Jacoby wasn’t shy in hinting GM will focus on making India an export powerhouse, while capitalizing on the country’s low labor costs. He expects 30 percent of vehicles produced will be exported for the Asian-Pacific market.

The man credited with pulling Australian production, and ex-Volvo executive, is on a mission to turn a profit in the Asian-Pacific. After all, it’s not personal. It’s just business.

Former GM Authority staff writer.

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Comments

  1. India is a vast untapped market and it’s about time GM focused on it. Also with low cost of manufacturing it makes sense to make it a focal point.

    Reply
  2. As I have said earlier, and will keep saying. Get the sonic hatch and sedan, along with the updated cruze, plus the trax and see GM’s sales increase rapidly.

    Reply

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