General Motors have announced plans to stop making cars for Indian market by the end of 2017.
GM said they will still provide maintenance services for Indian markets adding that their auto plant in Maharashtra would continue to make cars for overseas markets, mainly central and south American regions.
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GM said that as part of its global restructuring they will follow the same trend in South Africa as well as sell its manufacturing outfit to Isuzu Motors.
He said the new strategy will enable them realize an annual savings of $100million.
“As a result of these actions, GM expects to realise annual savings of approximately $100m (£77m) and plans to take a charge of approximately $500m in the second quarter of 2017,” it said in a statement.
GM’s announcement comes against the backdrop of predictions that India will become the world’s third biggest vehicle market by 2020.
But the firm has put faith in exports from India.
“In India, our exports have tripled over the past year, and this will remain our focus going forward,” GM International president Stefan Jacoby said in a statement .
“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,” Mr Jacoby added.