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.

Opel/Vauxhall Euro Sales - 2012-16 (Nations)

When one looks closer at national sales of Opel/Vauxhall, certain countries are more partial to them than others. So in the final in this short series, let's look at how national purchasing varied.

First up Germany is the biggest market in Europe and where Opel is based. That didn't translate in to sales during this present decade. It was comfortably behind Europe's second biggest, the UK. France may be the third nation in size but ran fifth since 2011, when it was one place higher. Ironically Opel /Vauxhall are to come under France's PSA control so it will be interesting to see if that makes any difference. Spain's car manufacturing industry benefits from Opel/Vauxhall so that could explain the strong support it gets there.

The others (6th-10th) generally follow the size of their respective markets, with the exception of Denmark, which boxes above its weight. Russia was abandoned by Opel, hence the crash there. Of those not included, Sweden is a notable omission. The list below is the top ten in each year.

12	13	14	15	16		2012	2013	2014	2015	2016
1	1	1	1	1	UK	258,852	289,279	301,931	311,642	288,865
2	2	2	2	2	Germany	224,468	217,686	231,147	242,677	258,598
3	4	3	3	3	Italy	82,806	74,709	80,643	94,424	102,034
6	6	4	4	4	Spain	52,698	57,417	70,488	81,976	96,525
5	5	5	5	5	France	78,923	65,024	66,791	70,952	75,273
7	7	7	6	6	Turkey	49,825	55,993	39,255	47,000	55,471
8	8	8	7	7	Belg/Lux	41,666	39,126	37,363	39,763	45,413
9	9	10	9	8	Nederland	41,338	28,391	27,820	31,368	38,775
-	-	9	8	9	Poland	-	-	28,052	31,914	37,501
10	10	-	10	10	Austria	21,323	21,752	-	23,977	24,864
4	3	6	-	-	Russia	81,242	81,421	64,985	-	-

Data source: GM Europe.

Takata

One song says love changes everything, and so does money. Corruption is rife in the world today and money is so often the motivation. Even human life can be a secondary consideration in the quest to gain or protect money.



Cars are convenient but also dangerous. Safety features are important to consumers and modern cars are full of  such life saving features. I find some such as lane departure warning as quite laughable but most are welcome additions. I must say as one who has always used seat belts I thought airbags were for Americans too lazy to buckle up (no offense intended). However, they do add to occupant safety so I've been won over.

Which leads to the point of the article. Japanese firm Takata changed the main ingredient for its airbags from tetrazole to ammonium nitrate in 2001. Ammonium nitrate provides more bang in a smaller volume than other propellants, which allows the company to offer a more compact device to manufacturers. It was also cheaper to make. However, they have in a few cases caused death by exploding and sending pieces of the device into the car's occupants.

Employee emails show that there were “dire warnings about safety and quality lapses years before Takata Corp would fully acknowledge the threat posed by its defective airbags,” according to a report by the Senate Commerce Committee. Senator Bill Nelson, a Floridan Democrat, says it now appears that Takata was aware of “serious safety and quality control lapses” in its factories as early as 2001.

Company officials debated the data regarding the product and testing of the inflator was manipulated to cover the issues. Nissan, BMW of North America and Ford have accused their airbag supplier Takata of fraud in a lawsuit to cover losses they incur because of its faulty inflators that have been linked to at least 17 deaths worldwide. Court documents filed in United States claim five automakers were aware of potential defects but continued using Takata’s airbags because they were less expensive. The allegations involve Ford, Honda, Nissan, Toyota and BMW.

All in all a sad tale of a business trying to get a competitive edge but getting it wrong and trying to cover it over. Did they really think they would get away with it? The cost of owning up would have been huge. It got worse by not coming clean. Money changes everything.