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General Motors to pull out of Gujarat to stem mounting losses

In a bid to stem mounting losses, US-based auto major General Motors on Wednesday said it will restructure operations at its Indian subsidiary by ceasing operations at its facility in Halol, Gujarat and instead invest in consolidating operations at its other unit in Talegaon, Maharashtra. GM is the first major auto maker in the last […]

By: ENS Economic Bureau | New Delhi | Published: July 30, 2015 3:25:37 am

In a bid to stem mounting losses, US-based auto major General Motors on Wednesday said it will restructure operations at its Indian subsidiary by ceasing operations at its facility in Halol, Gujarat and instead invest in consolidating operations at its other unit in Talegaon, Maharashtra.

GM is the first major auto maker in the last few years to pull out of Gujarat, at a time when all other manufacturers from Maruti Suzuki, Tata Motors, Honda Cars India to Ford India have made a beeline to invest in the state.

GM CEO Mary Barra said, “We want to have a sustainable, profitable business in India. I think we are making the necessary changes in India for the long term with a business that has sustained profit.” GM has installed capacity of 1,10,000 units in Halol and 1,30,000 units at Talegaon currently.

As per the company’s plans, the Halol plant in Gujarat will stop production by the second half of 2016. The shutdown of the Halol unit will affect 1,100 employees. The Talegaon plant in Maharashtra will be strengthened and become an export hub. Over 30 per cent of the production would be exported out of the facility in the next few years.

GM said it would invest $1 billion (Rs 6,400 crore) in India over next few years. It will create 12,000 jobs for GM India and its suppliers.

The company also said it will roll out 10 locally produced models, including SUV Trailblazer and multi-purpose vehicle Spin, from the Chevrolet family in the next five years.

Earlier in the day, Barra along with GM executive vice-president and GM international president Stefan Jacoby and GM India president and managing director Arvind Saxena met

Prime Minister Narendra Modi to brief him of Chevrolet’s plans in India.

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