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General Motors to invest $1 billion in India where sales are going down

Staff writer ▼ | July 30, 2015
General Motors will invest $1 billion over the next few years to turn India into a global export hub, even as it cuts production capacity in the country.
General Motors
Auto industry   GM will cut production in India to 220,000 cars
General Motors, which has the capacity to produce more than 280,000 cars a year in India, will reduce this to 220,000 a year by 2025 as it stops making cars at one plant and modestly raises capacity at its second plant inIndia.

"We need to have that kind of consolidation and rationalization to make sure we are here for the long term, that we have a sustainable business," CEO Mary Barra told reporters in New Delhi.

India's automobile market has been sluggish for the past few years, with annual sales of less than 3 million cars but by 2020 analysts expect India to become the world's third-largest passenger vehicle market after China and the United States.

General Motors' sales are falling and it is still losing money. GM lost 38.5 billion rupees ($604 million) in India in the year to March, a company filing with the corporate affairs ministry showed.

GM is confident of building a profitable business in India, Barra said, but did not give a timeline.