General Motors Restructures International Business Unit
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General Motors has announced plans to restructure its GM International Operations (GMIO) business unit. The move will see the automaker withdraw from several markets. The move is being painted as a way to “drive stronger financial performance and focus its capital and resources on business opportunities expected to deliver higher returns.”
Specifically, the automaker will phase its Chevrolet brand out of India and South Africa by the end of 2017, while transitioning GM India to a production hub only for export to other markets.
“As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company,” said GM Chairman and CEO Mary Barra. “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. We will continue to optimize our operations market by market to further improve our competitiveness and cost base.”
The automaker states that the decisions were made following an extensive review of operations in GM International markets and reflect a series of actions taken to improve global business performance that began in late 2013.
“These actions will further allow us to focus our resources on winning in the markets where we have strong franchises and see greater opportunity,” said GM President Dan Ammann. “We have compelling plans for growth in both the top line and the bottom line as we invest for the future.”
GM Executive Vice President and President, GM International, Stefan Jacoby said the company is running its GM International markets with an enterprise approach and making decisions that are best for the global business.
“In India, our exports have tripled over the past year, and this will remain our focus going forward,” he said. “We determined that the increased investment required for an extensive and flexible product portfolio would not deliver a leadership position or long-term profitability in the domestic market.”
In South Africa, Isuzu will acquire GM’s light commercial vehicle manufacturing and GM will cease manufacturing and sales of Chevrolet in the domestic market, subject to local regulatory requirements.
“After a thorough assessment of our South African operations, we believe it is best for Isuzu to integrate our light commercial vehicle manufacturing operations into its African business,” said Jacoby. “We determined that continued or increased investment in manufacturing in South Africa would not provide GM the expected returns of other global investment opportunities.”
The restructuring will specifically involve the following actions.
India
GM will maintain vehicle and engine production operations in India while ceasing to sell Chevrolet vehicles in the country.
GM’s manufacturing facility at the GM Talegaon plant will continue as an export hub for Mexico and Central and South American markets. GM will cease sales of Chevrolet vehicles in the domestic market by the end of 2017. Existing Chevrolet customers will continue to be supported in the market.
South Africa
GM will completely exit South Africa, including sales and manufacturing operations.
Isuzu will purchase the GM Struandale plant and GM’s remaining 30 percent shareholding in the Isuzu Truck South Africa joint venture. Isuzu will also purchase GM’s Vehicle Conversion and Distribution Centre and assume control of the Parts Distribution Centre. The company will phase out the Chevrolet brand in South Africa by the end of 2017. GM continues to work with PSA Group, the upcoming owner or Opel, to evaluate future opportunity for the Opel brand in South Africa. Importantly, existing Chevrolet and Opel customers will continue to be supported in the market.
East Africa
As announced on February 28th, Isuzu has agreed 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 market.
Singapore
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. This will deliver greater organizational efficiencies while leveraging global resources and in-market expertise.
Responsibility
The automaker says that it’s working with employees, their union representatives and local authorities to provide transition support across affected markets.
Financial Impact
As a result of these actions, GM expects to realize annual savings of approximately $100 million and plans to take a charge of approximately $500 million in the second quarter of 2017. This charge will be treated as special and excluded from the company’s EBIT-adjusted results. About $200 million of the special charge will be cash expenses.
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While Toyota, Ford, … are going on the road of success all over the world, General Motors disguise these commercial failures in saying: “This move improve the business”! For me, that’s close to the “dog ate my homework” culture which Mary Barra had to eradicate and she applies it cheerfully!
The shareholders aren’t excited by the Opel’s sale off to PSA and these several foreign market’s withdrawals. The GM’s shares price will never be boosted with these policy of the “Not expansion”!
Mary Barra is the worst CEO than GM has ever had! The beginning of the end!
Well, Toyota and Ford aren’t exactly expanding in India. Nobody outside of Suzuki/Maruti Suzuki is. India has become a strange market dominated by a single automaker. GM could have weathered it if they wanted to, but they seem so hungry on short-term fiscal gains that I wonder if there is a long-term global market vision.
The withdrawal African markets, however, are indeed representative of GM’s competitive disadvantage in every market outside of North America. GM (Chevrolet, in reality) is uncompetitive there for the same reasons it’s uncompetitive in Central and South America, the Caribbean, etc. The reputation of the Chevy brand is good there, but the sales performance is dismal due to poor aftersales support.
Hyundai and Honda’s sales india are good. This proves that some foreign carmakers can succeed in India. The GM’s indian products weren’t the most reliable and the dealer network was poor. On other side, The african market is a poor bargain: I think that it isn’t a mature market.
Honda and Hyundai sales in India are not “good”. They’re mediocre, at best.
Either way, GM should have worked on India. This is a poor decision and proves GM management is incapable of running an internatioal company.
The South African is actually pretty decent. It is similar to the Caribbean markets in terms of size and competitive environment.
Specifically, South Africa has been 2x/3x the size (by volume) of the Indian market for GM… though the costs may have been higher there (don’t quote me on that). Opel and Isuzu-sourced LCVs was doing well in South Africa, so the move to pull out of the market makes sense given GM’s sale of Opel.
VW is trying to get a foothold on the Indian market, now with an alliance with Tata, after the takeover of Suzuki failed. Common development is on the table, and maybe Tata producing for Škoda.
VW is there via the Škoda brand. But the boss of Škoda India just quit. They have to look for a new one.
Besides, PSA has recently (before the PSA-GM deal over Opel) acquired the “Ambassador” brand.
The PSA acquisition of the Ambassador brand is interesting.
There’s a GM connection there too, since previous owner Hindustan Motors produced the Hindustan Contessa for many years, which was a recycled, last generation Vauxhall Victor FE complete with upgraded Isuzu engine.
The best thing that the new little tiny GM can do is sack Mary Barra & Dan Ammann immediately. GM is heading in exactly the direction I predicted, it will not be long now before the company loses critical mass essential in order to be a global manufacturer, instead it will become a large provincial manufacturer primarily in the US & China. The final outcome will be GM will be swallowed up, even if they don’t want to be, by a one of the professional global automakers and if I were a betting man I would have a punt on Toyota. And finally only management as inept as GM could put a positive spin on this and seriously think anyone is actually going to believe it. Not long to go now, GM are already half way down the toilet bowl.
After seeing Barra get rid of Opel this dose not surprise me. Even most of the Barra fan base that think she is so wonderful have to question this. I never liked the idea of her becoming CEO. Its obvious that she and the rest of the upper management are simply not capable of running a international company and its easier to take the fast and lazy way out by pulling out of the markets then investing in and working to make them profitable. Before you know it, they will be number 10 on list of automakers.
Astonishing.
Regarding South Africa:
PSA had decided last year to concentrate on the Peugeot brand, and to end markting Citroën in SA. They might take over the distribution of Opel instead.
Regarding India:
In 2009, GM and its Chinese partner SAIC had announced to form a joint venture for India. Not much came out of it.
Now, SAIC has set up its own subsidiary called “MG Motor India” (MG is the brand together with the factory which SAIC bought when BMW was getting rid of its Rover subsidiary in Great Britain).
and
“SAIC has the Competition Commission of India’s approval to acquire General Motors’ factory at Halol in Gujarat. But the final deal is conditional upon General Motors − SAIC’s partner in China − settling labour issues at the plant. If that happens by the middle of next month, the Chinese company is ready to take over the plant as early as in April and roll out the its first vehicle from there late next year or early 2019, said one of the people ETAuto spoke to. If that doesn’t happen, it plans to build a new facility.”
writes the India Times
http://auto.economictimes.indiatimes.com/news/industry/exclusive-take-a-deep-dive-into-saics-india-debut/57396393
Funny: the India Times article is accompanied by images of Baojun branded cars..
Regarding the GM-SAIC JV in India:
http://www.livemint.com/Companies/VZMqBsgHkM9DkPbDFe0gNJ/GM-buys-43-stake-of-SAIC-in-India-operations.html
reports that GM bought out SAIC in this JV in 2012
The future is all about keeping cost down and profits up.
Ford is struggling here as they are making profits but they are not lowering cost. Hence the first step this week in cutting white collar staffs and next factories and markets.
Toyota is struggling with cost and their profits have slid 20% lower this year and will slide more when the markets flow. They are now looking to restructure cost as they need to get them under control.
Companies anymore are no longer too large to fail and when not if hard times come they will fail. Also the added cost of technology and how cars are bought and sold will change much in the coming years with the increasing cost.
We are already where many people can not afford a new car and a dive in the excinomy will only drive that up along with ever increasing prices.
The companies that are financially responsible and fiscally set will thrive.
Like Mary, Mark and Dan are doing the right things for the future.
In many cases less is more.
Mary and Dan are focused on short term results and stock price. We don’t hear or see VW or Toyota pulling out of markets to focus on the maybe of Maven-like mobility.
Ford fixed its European opts by reducing footprint and reducing engineering costs: This is important because the EU, unlike China, isn’t a JV and this has great potential to drive profits.
GM is quickly transforming from predator to prey and will be swallowed up by Renault Nissan, Honda or even PSA (made stronger by Opel) within a decade.
Globally Chevrolet is semi damaged due to decades of neglect. Opel offered GM a second chance in markets like India where Chevy was failing.
How do you figure short term?
First VW and Toyota were long established globally they are not trying to enter markets now. For now bot are just shoring up what they have.
You have noted earning at Toyota are off by 20% and my slip even more as the year progresses.
Ford is axing the white collar force first by retirement and next by cutting staff. The EU is not going yo save anyone as it is a zero to negative growth market. It is a market you maintain if you are there or forget if you are trying to do volume. Only Cadillac and the Chevy performance cars are of any value there once the new global models arrive.
Honda struggles in Europe as do many Asian brands.
PSA will be the next FCA as time passes.
There really is only one stable growing market and that is China. Even then it will only go on as long as there are no global conflicts and as long as China let’s it go on.
Because if that it is good GM pulls back and focuses on their core markets and make them profitable and stop the hemoraging of cash in markets that only a fool would enter under these economic conditions.
So few of you just don’t get it that the market will decline in volume in the near future and when it does volume will not do ups a bit of good and lowered cost and higher transaction prices will be the only way to make a buck.
as a shareholder, i’m glad gm is getting out of markets that are unprofitable.
the margins on low cost cars sold in india are probably razor thin at best.
i don’t think wall street cares whether or not gm sells cars in india, south africa or europe for that matter. they are more worried about whether gm will be struggling during the next downturn. they care about return on invested capital.
the discipline required to exit these unprofitable markets is exactly what gm needs. that money can be better spent on investing in technologies driving the rapidly changing automotive landscape.
True but as a shareholder you have to question the ever lowering stock, despite billions of share buy-backs, selling enormous manufacturing capacity and a multitude of announcements made in the hope to shift the stock price back up… GM’s share price today is more or less again at IPO level of so many years ago… Something seems to be really wrong.
But then you have yo look at the big picture. All auto stocks are struggling and they are all stagnate yo much growth.
The only one that has done much has been a Tesla due to the point that it is seen as a tech stock not automotive. This is why do many auto makers are now investing heavy in advanced technologies like autonomous cars and artificial intelligence. GM and some others have tried yo leverage the EV products but sales volumes are too low to help yet.
Tesla while it was high is way over valued and it will adjust in the not too dustant future. Even Elon stated recently they are over valued. This may be a sign of a pending drop in their value and Elon was just getting out front of it.
The stock market is all in the tech stocks. The next big movers that will suck up the investment dollars will be the Bio Tech field. I have a family member that cleaned up on the electronic tech stocks and now is into the bio tech stock. He has made and lost millions but he is still doing well.
The real truth is auto stock are a place to play it safe with money but not expect much yield. They hold up a little they go down a little bug no one is going to get rich on them years ago.
The only way to change this is if one of them has some major breakthrough in mileage, cheaper fuel or even better batteries that last longer and charge faster at a lower cost.
Till then the only thing they can do is control cost, increase profits and take those profits to find and improve technology.
something seems to be wrong but is it wall street or gm? i think it is wall street but time will tell.
People today and funds love the higher risk but potential higher return stock in the tech areas.
Everyone wants to be dpfirst in on the next Apple and Microsoft where growth is not limited.
As for a GM and all other mfg they are in a area where growth is limited mostly to China. They are trying to play the tech angle but so far few are bitting on it.
Just look at the responses of many here that have no real clue on the market or the rapid change of the auto industry. They appear to be fooled that growing a MFG is easy and will bring a wind fall but it is just the opposite.
The only company making the volume thing really work has been VW with their product mix but only time will tell if they can sustain it.
Toyota and Ford are now following GMs move to improve profits but also lower cost. It is about efficiency for most mfg anymore.
It is like the Cavs Celtics last night. One team the Cavs were very efficient and the Celts were not even with the same number of players. One team produced record numbers but the other struggled. The same is going here.
FCA is a prime example of inefficiency as while they show profits the are way over capacity and even the profits they show are not enough.
Why are they doing cars like the Demon? They are so inefficient they just don’t have the money for new product development. Jeep can only fund so much.
The stock is trading at current levels b/c investors are seeing likely peak auto sales in NA which outside of China is the only market that matters for GM and where they make all their money. Last time we had an auto recession, GM went bankrupt.
I’m not saying that is going to happen again, but people look for pattern recognition and realize that GM is not the merchandise you want to own when it’s most important market is seeing declining sales.
That being said, I think that once the market starts to correct (SAAR down 5-10%) and GM can show that it has fixed its cost structure and profits don’t completely collapse, investors may actually pay a higher multiple for the business and the stock can work once sales find a bottom. May sound counter intuitive, but no one is buying this stock until then.
The key is you can continue to dump money into markets that are for one difficult to grow in the present and future climate. You at best may get a marginal return but odds are you will have a hard time breaking even.
Or you can take that money and invest it in the markets that will show a strong return and growth an invest in new technologies that will only make you stronger and more profitable then return to these markets when you are better suited and financed to compete.
The future of the auto industry is going to be a very rocky one size matter little if you are not making money based on cost with good returns. Just making a profit is no longer enough and doing so only on profit is a major risk.
Stock prices are down in the auto industry for a reason. Growth is not expected by investors. So companies need to become lean mean fighting machines.
Steve is spot on with the future needs and you are going yo see others follow GM on the same path. Ford is starting now.
GoodyeR tire diversified into many areas other than tires, while the made money it killed their stock prices as the small profits were not enough. It also killed them on new investments into new technology.
They fought off a take over attempt and sold off their non core tire businesses. They took that money and invested it in tire technology. Today the are one of the most profitable tire companies and one of the best tire stocks out. They know can weather poor global economies. Others not so much.
A little history of GM in South Africa might explain GM’s exist. To meet local content rules in 1966 GMSA selected the Chevrolet four and six-cylinder engine in 2.1, 2.5, 3.2, 3.8 and 4.1-litre capacities. The problem was most of the market was in the 1.5 to 2.0-litre category.
Their next blunder was to announce the withdrawal of the Opel Rekord in 1971 which at the time had been GM’s best seller, expecting to replace it with the homegrown Ranger. Total Opel sales went into free-fall so everything was named Chevrolet. But in 1982 all models were named Opel again, but then in 2009 switched back to Chevrolet mostly using Daewoo models. More recently Opel has been brought back.
With indecision like this the poor penetration is understandable. Unfortunately Peugeot’s performance in South Africa has been no better in spite of a stellar reputation prior to the 1980s.
How soon before GM leaves South Korea?
My guess Louis – not very long at all. Little tiny GM currently has the ability to make inexplicably bad decisions that are unmatched anywhere else in the automotive industry.
Thanks for the backgrounder, Louis. The issue that has plagued GM up until this point (and possibly even now) is a lack of a vision and let a lone a consistent one — as perfectly illustrated in your comment.
One has to wonder if the next wave of GM management will/want to revise the decisions being made here… and if so, when.
Gm has to fire Mary Barra, Dan Ammann and Stefan Jacoby.
As a GM shareholder it can’t come soon enough
could you elaborate on the reasons?
I think it was Marx who is purported to have said that history repeats itself – first as a tragedy, then as a farce.
Looking at GM over recent years, it reminds me of British Leyland – withdrawing from global markets, reducing volume, whilst somehow creating some brilliant technology and some great product along the way. The soundbites are even the same – ‘exiting unprofitable markets’, ‘focusing upon strengths’, ‘preparing for the future’, ‘delivering operational efficiency’, ‘creating the products our customers want’ and so on and so forth. We all know how British Leyland finished up; it wasn’t pretty.
But if BL was a tragedy – and at times perhaps a comedy – then GM is surely a farce. Like any business, GM does face problems in key markets. But what manufacturer (automotive or otherwise) doesn’t? However, rather than overcoming those problems, GM seems to have a preference for initially ignoring them and then selling them off.
Living in the UK, I’m most familiar with the farce that is Opel Group. For decades Opel burned through billions of GM’s money almost unchecked. Opel’s problems were clear to see and with the right leadership, fixable. Firstly, poor product planning; secondly post-reorganisation, 2 factories too many – both of which rather inconveniently happen to be in Germany; and finally, a misalignment of cost and revenue bases. For many years it appeared that so long as Russelheim didn’t burn through too much of Detroit’s money, then all was well. How many other businesses can make a continual operating loss for 2 decades and get away with it? Then as the situation escalated, rather than fix the problem, the decision was made to instead sell the problem off.
But what I find most disturbing about GM’s wider actions is their short-sightedness. The reorganisation of GMIO will supposedly save US$100m. Yet the cost of saving this money, is writing off US$bn’s of future revenue and handing profit and revenue opportunities to competitors such as PSA and Isuzu on the proverbial plate. The question GM should perhaps be asking itself is ‘How PSA and Isuzu can solve problems that GM can’t?’ Or more exactly, perhaps GM’s investors should be asking the question – how can other company’s leadership solve problems and deliver revenue and profit that GM’s current leadership can’t.
Taxi for Barra?
Totally agree John, if ordering a taxi for Bara might as well get one for KTN & Muller at the same time.
Do you have Maven’s number handy David? 😀
The story of British Leyland is the history of the British automobile history as a whole, and that mirrrors the rise and demise of the British Empire, which the Brexiters are so nostalgic of but can’t revive.
If there are still automobiles manufactured on Great Britain — and she shares third place within the EU with France by total number of automobiles manufactured — it is due to Margaret Thatcher leading the United Kingdom into the European Union, besides smashing trade unions: as a cheap labor export platform to the continent, as part of integrated production processes spanning the whole continent, where each part passes many national frontiers before finding its final destination in some finished automobile.
Is the shrinking of GM then reflecting the decline of US world domination?
No taxi can escape the tectonic changes of the world situation.
Of course BL’s fortunes mirrored those of the UK motor industry as a whole, since BL was effectively the UK motor industry post 1968 and the merger of British Motor Holdings with Leyland Motors.
Not sure however I buy the suggestion that BL’s demise is directly linked to loss of Empire. Rather poor leadership, poor marketing, short term planning, an absence of any kind of credible strategy – at least until Sir Graham Day’s appointment – and a reluctance to take difficult decisions were the nails in BL’s coffin.
It’s many of these very same variables which potentially threaten GM’s future existence. I’m increasingly of the belief that if GM’s current leadership team are the answer, it must have been a very silly question.
“Rather poor leadership” etc.
Concretely, inability to adapt to the “loss of Empire”. One might debate in the first place if such an adaptation was possible at all.
Your statement that “BL was effectively the UK motor industry post 1968” calls for mentioning of the Brexiter’s illusion that there is “a UK motor industry” which is “exporting to Europe” vis à vis a “European motor industry” is exporting to the island. Actually all of the British motor industry is foreign owned (with tiny exceptions) and is only a part of a continent-wide integrated production process.
Maybe that the GM management is adapting better to the changing situation.
Whereby they are not only dealing with the declining clout of the USA, but also with other changes, on the one hand, the shift from car ownership to car sharing, on the other hand the quest for all electrical cars which are much less complex than cars with combustion engines. And fully automatically driving cars (i.e. autonomous cars without a track guidance) might shrink the automobile industry to a minimum. Imagine self-parking cars which don’t need space in front of your house to park, but vanish to some central storage with automatic docking to recharging facilities, and which come to your place when needed like a taxi or a Uber driver. Individual ownership of a car would vanish, and with the automobile industry as we know it. The country which would be the hardest hit is Germany, where the automobile industry is kinda monoculture.
I forgot to mention my observation that the limiting factor of automobile usage is less the saturation of cars per inhabitant, but cars per surface, i.e. per square kilometer, or to be more precise, per street lane length.
‘Your statement that “BL was effectively the UK motor industry post 1968” calls for mentioning of the Brexiter’s illusion that there is “a UK motor industry” which is “exporting to Europe” vis à vis a “European motor industry” is exporting to the island. Actually all of the British motor industry is foreign owned (with tiny exceptions) and is only a part of a continent-wide integrated production process.’
No. We operate in a global industry. Which makes it all the more bizarre, if not downright worrying that GM is effectively beating a retreat from international markets.
BL demise was mostly due to some of the worst cars made in the free world in the last 60 years.
Electrical, rust, and quality issues were horrid to the point even the brits would not buy their cars any longer.
The post war years were years of poor management and goverment control
If one was to look at Europe as a whole most of the poorest cars made were from goverment controlled companies either side of the iron curtain.
Nobody in the UK, whether they voted for or against Brexit, gives a damn about the “British Empire” or its so-called successor the “Commonwealth” they are non issues. As for Thatcher taking Britain into Europe try Ted Heath.
Yours is the best comment that I’ve read in a very long time.
GM has quit an astounding number of markets in just a few years. Barra thinks short term: GM as niche player selling large, high margin vehicles until the ‘Mobility Revolution’ transforms the industry.
It’s debatable how extensive ride sharing will become; Barra knows this, only acts in an effort to boost share price.
GM will end up absorbed by one of the monsters it helps create: either SIAC or a punchy PSA under Traverse. Barra and Co have no clue as to GM’s next step. As opposed to fixing damaged parts I expect to see the General quit more markets and eventually (minus Wurling) put out the same volume as Honda within 7-10 years unless stockholders fire Mary.
Maybe a merger witha spun off Jeep isn’t such a bad idea? Jeep/Buick might work in India.
As a long rerm shareholder i’m fine with them cutting where no long term profitablity path can be seen.
What GM/Ford need to do is focus specifically on profit, marketshare is only important if profit follows, expecially when it looks like global volume is going to fall overtime.
Instead of saving money, why not investing money. Cut operations and quit markets when Toyota and others are globally present and strengthen their position, is weird. It’s a strategy for a grocery, not for a company like GM. GM head’s have to invest on the brand perception. On the Customer Relation Management. On the after sale.
GM is one of the highest investing companies in the world now as the can afford it while others can not.
This is all due to controlling cost and losses.
It will be interesting how this all works itself out. GM’s reorganisation may well cause ripples beyond GM itself:
‘It’s funny the things you hear when you’re out and about, going about your business. Today involved meeting some industry types and, while siting in the boardroom waiting for the main agenda of the day, an interesting titbit came my way. ‘I hear a rumour from a very well-placed source that Jaguar Land Rover is considering buying Vauxhall,’ this industry executive said.’
See http://www.aronline.co.uk/blogs/blog-jlr-could-do-wonders-with-vauxhall/ for more.
I did hear within days of the GM / PSA announcement a similar rumour from someone who might have had an insight into JLR’s strategic thinking, but marked it down as little more than tittle tattle at the time. But as a highly respected motoring journalist, I don’t think for a moment that Keith Adams would publish a story that didn’t have some basis in reality.
This rumour produced by wishful thinking had surfaced on this blog earlier.
From the article linked to above at “Aaronline” by its owner Keith Adams:
Taking over of Vauxhall by JLR “could possibly happen with the help of Tata.
Given how closely JLR engineers are working with Tata on its future model line-up right now (so I’ve been told, anyway),”
This nonsense completely ignores the fact that Jaguar-Land Rover is one of many 100% owned subsidiaries of Tata Motors, India. So, if someone is taking over, it is not the British subsidiary, but Tata Motors as part of the overal Tata conglomerate.
http://www.tatamotors.com/about-us/subsidiaries/
JLR is to Tata not more than Opel is to GM, and will be to PSA. Just one subsidiary.
With the Brexit axe in the offing, nobody needs additional automobile production capacity on the island. Already before the Brexit referendum, Tata had decided to build a new JLR factory in Slovakia.
Regarding technical cooperation, Tata has concluded an alliance with VW. Less for JLR, but for the Indian market.
http ://www.tatamotors. com/press/tata-motors-signs-memorandum-of-understanding-mou-with-volkswagen-group-and-skoda-for-exploring-joint-development-projects/
This statement “JLR is to Tata not more than Opel is to GM, and will be to PSA. Just one subsidiary.” is not correct. JLR s not so well integrated in the world wide Tata operations as Opel still is in GM’s.
But nonetheless, big decisions by JLR are not taken by the local JLR management, but by the owner, which is Tata Motors.
PSA will never give up the UK market (Vauxhall) that earns a disproportionate percentage of European profits for Adam Opel AG.
Vauxhall isn’t so much a brand as it is a Seavy marketing gimic. Vauxhall isn’t a heavy burden for PSA to carry as it only requires marketing–much the same as if it were to change its name to Opel.
Funny enough, the CEOs both of Tata Motors and its JLR subsidiary are Germans.
JLR CEO Speth worked for BMW, Linde (not automotive) and Ford’s “Premiere Automotive Group” which included Volvo, Jaguar and Land Rover.
Tata Motors CEO Günter Butschek worked before for Airbus and Daimler.
Opel has set the tone for GM global opts for many years now whether this meant the development of “future cars” like Malibu/Regal, high quality platforms, small cars for Latin America and China.
When GM sourced Buicks for China in the late 1990s much came from Opel. I do not believe that Opel small cars represent only 20% of GM total given that small cars define markets like Brazil. Sourcing these models from China will damage sales given the similarities between the European and Latin American markets.
Lastly, Toyota is swallowing up smaller rivals to gain scale; Nissan is on a feeding frenzy, too. GM should be looking for partners to ride on future GM architectures. While FCA or a spun off Jeep and Ram do have appeal, GM is missing out by not forming a genuine alliance (not a purchase or merger but instead partnership) with both PSA and possibly Tata. Otherwise, GM will end up under either Chinese control or via bankruptcy and political necessity merged with Ford and what remains of Old Chrysler Corp.