Is GM investment in India is gonna work?

General Motors is investing $1 billion in Chevrolet in India and roll out 10 new models in the next five years. Will it work in India ? If it works then , it would be more then good news. The company has already declined Chervrolet models sales in India.The two decades back when GM entered the market , it failed to capitalized the market. The company began its operations in India in 1996 and has invested about $1 billion since then to build its two factories. Still, it has been unable to carve out a very big share of an Indian car market. GM lost market share in recent years to Maruti Suzuki India Ltd. and Hyundai Motor Co.

Here are some facts that GM should take into account

Indian Automobile market

Car market leader Maruti Suzuki India witnessed 8.6 per cent higher sales at approximately 118,551 units in February 2015, out of which 107,892 were sold in domestic market and 10,659 units were exported. Furthermore ,Hyundai Motor India Ltd (HMIL) reported a 2.4 per cent growth in total sales at 47,612 units in February, compared with 46,505 units in the same month last year.Also ,In the two-wheeler segment, Hero MotoCorp witnessed sales of 484,769 units in February 2015.Moreover ,TVS Motor Co posted 15 per cent higher sales at 204,565 units against 177,662 units. Bajaj Auto sold a total of 243,000 two and three-wheelers segment.

Some Big Investment by other companies

DSK Hyosung has announced to set up a plant in Maharashtra and is planning to add 10-15 dealerships in the next financial year (FY 15-16) mostly in the tier-II cities and introduce more models in the 250cc segment.Germany-based luxury car maker Bayerische Motoren Werke AG’s (BMW) local unit has announced to procure components from seven India-based auto parts makers.Mahindra Two Wheelers Limited (MTWL) has acquired 51 per cent shares in France-based Peugeot Motocycles (PMTC).Suzuki Motor Corp is planning to sell the automobiles made in the Gujarat plant, in Africa.Tata Motors Ltd, India’s largest automobile maker, will sell trucks in Malaysia, Vietnam and Australia to strengthen its presence in the Asia-Pacific region.Furthermore ,The Japanese auto maker Maruti Suzuki expects the Indian passenger car market to reach four million units by 2020, up from 1.8 million units in 2013-14

According to Mr Vient Cobee , Corporate Vice-President,NissanMtors,s Dastun ,India is probably the most competitive country in the world for the automotive industry. Also they highlighted  ,It does not cover 100 per cent of technology or components required to make a car but it is giving a good 97 per cent .Furthermore, it stated that By 2015, India is expected to be the fourth largest automotive market by volume in the world. Also , it highlighted that ,Over the next 20 years, India will be a part of the big global automotive triumvirate.

GM changing their strategy to blend it in , cover the decline sales. It appointed Kaher Kazem, managing director of GM Uzbekistan, as the chief operating officer for its operations in South Asian nation. Furthermore , the company  hired Hardeep Singh Brar from Volkswagen AG to lead sales. According to data from the automakers association, it shipped 2,011 cars from India. Furthermore ,According to Stefan Jacoby, GM's chief of international operations,  GM will also launch 10 new domestically manufactured vehicles in India over the next five years in a push to double its market share in the country by 2020.Also he mentioned The Detroit auto maker will use the money to launch 10 locally produced Chevrolet vehicles in India over the next five year. Will it work? we will just have to wait and see.