The Domino Effect – GM’s Exit From India

By now, we believe, you would have heard that Chevrolet, a division of GM, will be putting a stop to its sales in India by the end of this year. The company has been struggling and has had a market share under 1% in 2016-2017. This news has already slashed the resale value of the company’s existing cars and could have set-up potential barriers for its re-entry in the future. Although, Chevy isn’t closing the manufacturing plant to focus on exports, several workers would still lose their jobs.

 

The decision must have been a tough one, however, it could have set-off a domino effect. We might see other foreign car makers following the lead in the near future considering their low market shares in the Indian market.

 

Majority share in the passenger car industry is controlled by Suzuki and Hyundai, which is about 65%. Other players have been striving to gain more market, but have been able to occupy only a small percentage.

 

Volkswagen holds about 1.6% market share at this time, Skoda’s falls a little below 0.5%, Ford has managed around 3% while Nissan acquired 1.9%. Fiat ends up with the lowest share of all going up to 4 decimal places at 0.0018%.

 

Although, post demonetization, sales of all manufacturers have faced a decline, it might have made things somewhat more difficult for already struggling brands. The cumulative effect of demonetization and GST might force these car makers out of India leaving us with fewer options to choose from and driving existing prices higher and making waiting periods longer.

 

 

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