General on a march

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India is like an ace of spade for GM, they have a killer strategy in place, let’s see what...

GM has been bleeding profusely, what with the US & European markets in a state of flux. Also adding to its woes are the Japanese car-makers Honda & Toyota, that are eating away GM’s market share. Contrary to this, the Indian automobile industry is growing at a brisk pace of 15%, and offers that much needed relief package for GM. The pawns and pieces for this US automobile giant are falling in exactly the places it wants them to.

Till now GM’s Indian expedition has been ‘so far, so good.’ However, in 2008 the company has some mighty plans up its sleeves, to duel their dominating stand in the industry. Growing by a phenomenal 74%, GM India sold close to 64,032 units in the year 2007, almost doubling last year’s sales of 34,900 units. With introduction of newer models in the portfolio, the company is anticipating an increase in its demand. The capacity of the Halol plant has been increased to 85,000 units while the new Talegaon facility is expected to produce 140,000 units. The new exuberance has percolated to almost all the company catered segments. GM has now overtaken the mighty Honda and the agile Toyota in sales, occupying the fifth place. GM expects the market to expand further and is firing all cylinders to get the desired volumes. After a mixed bag response in higher segment, GM is now concentrating on small cars segment.

Karl Slym, MD & President, GM India, told 4Ps B&M, “There is more opportunity for the small cars in India and there is room for more vehicles. We are developing something in our labs and will be launching another car in the Spark segment some time soon.” Clearly this time, GM is leaving no room for mistakes. It is now very clear that GM has chosen the Chevrolet brand as the platform for its future growth. Also all new products introduced will be un der the brand name Chevrolet. Explains Slym, “We added Spark, U-VA, Optra Magnum and Captiva to the Chevrolet brand as it is important to clarify to the customers what the GM brand stands for in India.” As branding holds such relevance, the company is “now banking on brand enhancement and building consumer awareness.” In order to reach these ends effectively, GM is now ready to bring in its premium brands into Indian terrain. “I’ll be definitely going beyond the Chevrolet brand. Presently Chevrolet looks after 90% of the market. Now we also have to take care of the remaining 10% of the market,” says Slym.

With its portfolio and strategy in place, it seems that GM is well on its way to become a wholesome automotive player in India. Apart from the innovative small cars like the Spark and U-VA, the introduction of punchy CRDi’s in its range has further filled the lacuna that was left due to lack of diesels earlier. With the dealer and service outlets growing in numbers, the company is thinking about being both “flexible and nimble” in the long term. Even though Toyota might eventually clinch the numero uno position in the global auto mart, the hard hitting truth remains – GM has left it way behind in the Indian market, a market, which may finally decide the destiny of the global auto market.

Edit bureau: Karan Mehrishi

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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