CHEVROLET LEAVING INDIA – ONE CAR LESS ON THE CONGESTED ROADS!

By Ruma Dubey

Travel on the roads of Indian cities, it is only Maruti that you see all around and then we also see a fairly large number of Honda’s, Mahindra, Hyundai and quite a large number of Skoda’s too.  You see many brands but very rare is the sight of a Chevrolet, from the stables of General Motors (GM).

Last fiscal, it sold less than 26,000 units and this was a YoY fall of 26%. The company was optimistic as it produced 83,368 cars.

Thus it comes in as no surprise to read that GM will stop making cars for India. Chevrolet was the only car they were selling anyway after Tavera suffered a major blow to reputation due to 1.14 lakh cars getting recalled. It has two manufacturing plants in India – one in Talegaon in Maharashtra and another one in Halol, Gujarat. It is downing the shutters on its Halol plant completely, which as per market grapevine is to be sold to China’s SIAC Motor Corporation. The Talegaon factory is to be used to make cars for exports. As such, over 80% of the cars made in India were being sold in Mexico, Central and South America and even now, GM will not quit lock, stock and barrel from India – it will continue with its manufacturing but no cars will be sold in India; it will be all be exported. So for GM, India will remain a mere base to make its cars at a much cheaper rate and get access to export markets; not to mention, save taxes in USA.There are rumours though that eventaully it wll sell off its Taloja plant too, maybe Peugeot, which has been scouting aorund for a place.

Despite stopping the selling of Chevrolet in India, it will go ahead as planned and launch it’s ‘facelifted’ model of the Beat hatchback. It is said to have already produced around 2,000 units of right-hand drive versions of the Beat facelift. The launch will thus take place to simply clear this inventory.

There are various in the media who feel that this is a BIG thing, a big story lurking here. But sadly, there is really no big story here. The company was making losses and did not see the sense in spending more to get attention so thought it was best to call it quits and cut its losses. GM did previously shut down operations in Australia, Russia and Thailand; the same day it announced India’s closure of selling, it sold off its stake in light commercial vehicles to ISUZU. The story is big when a company leaves because it is not able to work in India or if it feels that India is no longer a good destination.

The story here though is that hope others do not follow suit. Making India into a mere manufacturing hub is not good – especially when it will not be sold in India. Tomorrow, Apple can do it or Coke or so many other American or foreign companies. If other use this trick of the trade and stop selling in India but use the manufacturing base to export, then that is cause for worry. We do not want to become a China – the factory of the world. There is no thinking or innovation in that and truly no guarantee of sustainability. Tomorrow there is some other country which will allow manufacturing at cheaper rates, it will move there.

Said this time and again and will say it again today - world over, right since ancient times, Indians are known for their proficiency in things which require a lot of intellect, a lot of creativity. Excelling in mathematics, science and art is in our dna, we are genetically endowed with these skills. So when we have this strength of brain power and creativity, it would be wrong to make India into all about brainless factory work? We need to work towards making India an R&D hub for the world?  Let China make things while India can create things which China can make? Doesn’t that automatically put us in a higher position – brain is always right at the top.