22 May 2017

GM India/South Africa : A Disappointment

This bakkie wasn't enough to save Chevrolet South Africa

GM has decided to stop selling cars in India but keep on making them there. I find that hard to fathom. By making cars there, surely that avoids import duty and allows the cars to be sold profitably. Despite being in the market over 20 years, it still had less that 1% market share. For that reason the plug has been pulled.

At the same time, the decision has been made to leave South Africa, both in manufacturing and sales. The plant will be taken over by Isuzu, who currently share it. This means Chevrolet will leave the RSA after over 90 years there. As for the Opel brand, it will be up to PSA to take that over if they wish.

Sales of Chev have been in free fall while Opel has held up better. Market share for passenger cars dropped from 7.7% in 2012 to 3.3% for 2016. The decline would have been worse but for Opel. Light commercial vehicles fared slightly better, from 12.1% in 2012 to 7.9% in 2016.

GM Passenger Car Sales : RSA

Make/Yr 2012 2013 2014 2015 2016

Chevrolet 31,183 23,328 21,621 14,389 7,847

Opel 2,704 2,603 3,598 6,486 4,101

Total 33,887 25,931 25,219 20,875 11,948

Share 7.7% 5.8% 5.7% 5.1% 3.3%

GM LCV Sales : RSA

Chevrolet 19,556 18,484 16,865 16,693 12,578

Share 12.1% 11.0% 9.7% 9.6% 7.9%

There is no point in running operations that are losing money. However, as to why GM struggles to make money while other succeed is a valid question. Whatever the reasons, GM has decided to terminate its problem areas rather than continue to try fix them.

Data source: Naamsa.