Case Study | General Motors: Why is it no more?

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It has been more than three years since the exit of General Motors (GM). They stopped selling cars in India after fighting for more than twenty years to get a grip of the local market.

GM faced ups and downs in their Indian journey. They entered India with Opel and sold cars like the Astra and Corsa. Initially, those cars sold in decent numbers, but people encountered maintenance issues, and novel cars from the other competitors were introduced, pushing GM to withdraw Opel from the Indian auto market.

After that, the Chevrolet brand got launched by GM and offered cars in various segments. The Optra (sedan), Tavera MPV, and Spark (hatchback), while the fresher ones were the Captiva, Cruze, Beat, Enjoy, Aveo, and the Sail siblings. The Trailblazer entered and left, and no one noticed.

In 2017, GM shuttered its operations in India. So, what happened?

The management

An organization’s success runs majorly on the people working in it. However, the way of working at GM is very bureaucratic, and people do not take up leadership or make their own decisions quickly.

The company had nine different CEOs in the 21 years in India. Because of this, there tend to be many changes to the corporate structure, and this is why employees were unable to follow a definite long-term plan or strategy.

Dealership network

A good network is necessary to sell a good product. During GM’s good days, they had more than 400 dealerships in India. But, people were facing problems with dealerships, dealerships themselves lacked confidence in GM’s new products, and thus their sales dropped.

Because of this, GM’s dealership count slipped from 400 to 200, where most of the dealers switched to different auto brands.

Customer service

For more than two decades GM was in India, it introduced above 20 different models but withdrew 10 of them. The price of their cars varied from Rs. 3 lakhs to Rs. 30 lakhs. They often made changes to the model line-ups, and that brought down the resale value of GM’s cars.

The technology

GM automobiles used old platforms and engines. Hardly any car from their portfolio had modern tech included. There were even some cars that squeezed through to pass emission procedures.

Their components’ quality only degraded, and the long-term reliability of their cars was just a huge concern. Simultaneously, the competitors were serving new platforms, better engines, and awesome cars.

It was a sad sight to see a titanic automaker exit the Indian market. The Indian auto market is the second-largest in the world, and the potential here is massive. It is complex but not impossible to hold ground since other foreign companies are doing well.

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