MARKETING

INDIA CHEVROLET CASE ANALYSIS MANAGEMENT

THIS CASE ANALYSIS EVALUATES THE HISTORY OF CHEVROLET AND ITS

NEEDS MOVING FORWARDTO REMAIN A PROMINENT FORCE IN THE
AUTOMOTIVE INDUSTRY

ANAND R TO-
MBA 1ST SEM PROF. VISHWANATH KUMAR
SINDHI COLLEGE OF MANAGEMENT MARKETING MANAGEMENT
Introduction

The Company was founded in the year 1908. It is one of the largest manufacturers of cars and trucks
globally. General Motors initiated its operations in India in the year 1928, but in 1954, the corporation
closed down its assembly operations. Although GM continued its association with Hindustan Motors and
manufacturing of Bedford trucks, Vauxhall cars, Allison Transmissions and off-road equipment were carried
on.

GMIPL was created as a joint venture in 1994.Hindustan Motors shared equal percentage of ownership
along with General Motors, to manufacture and sell Opel branded automobiles. Till 2003, GMIPL continued
manufacturing Opel cars at the Halol facility in Gujarat and then it switched to producing Chevrolet cars.

GMIPL shifted its headquarters to Gurgaon in 2000. In 2003, the company launched its technical center in
Bangalore. The technical center included research and development facilities, vehicle engineering activities.
The technical center also provided purchasing and financial support services for smooth operations of
General Motor offices outside India. A vehicle design studio was set up by the company in 2007. A second
vehicle manufacturing plant was set up in Talegaon in 2006, which started producing vehicles of the brand
Chevrolet in September 2008.

General Motors in 2009, General Motors declared a new 50-50 partnership with Shanghai Automotive
Industry Corporation of China, the partner of GM's main venture in China for carrying out its operations in
India.

General Motors Manufacturing Plants in India

GMIPL has manufacturing facilities in various places in India as Halol in Gujarat, Talegaon Dabhade in
Maharashtra. Its headquarters are in Halol and Gurgaon and the company's technical centre is in Bangalore.
The Halol and Talegaon Dabhade units of the General Motors have a combined annual production of around
385,000 vehicles.

GM Models in India

Find the list of the models along with their features, manufactured by General Motors India. It manufactures
all its cars under its subsidiary Chevrolet.The features enlisted will help you choose and buy your dream
vehicle Chevrolet Car.
General Motors ProductsJust look at the global portfolio of General Motors. You get so many nice and
tempting cars but look at what we got in India. Most of the Indian GM cars were rebadged Daewoo cars and
honestly, out of all these cars, it is only the Cruze which managed to get some amount of fan following. The
Beat, Cruze and Tavera were the highest sellers for GM. The Beat looked good when it was launched but
then what happened, GM continued to sell it for so many years without any major update. The Tavera was a
popular cab but then what happened, GM screwed up on the emissions front (something similar to the VW
scandal) and close to 1.2 lakh cars were affected. The Cruze was known for its performance and quality but
newer cars like the Volkswagen Jetta, Skoda Octavia and Hyundai Elantra ate its market and GM was just
watching.

GM had a market share of about 6% in 2010 which later fell to 1%. In 2015, GM decided to work on
increasing their share to 3% by 2020 and while the market grew grew by 9% that year, GM’s share went
below the 1% mark. At the 2016 Auto Expo, GM showcased the Beat Activ and Beat Essentia along with a
host of products including some global cars. In 2017 they even sent out invites for the media drive of the
new Beat just days before announcing their exit! Needless to say, the drive never happened.

These were the top reasons why GM never succeeded in India. It was in May 2017 that they announced the
shutdown of local operations by the end of the year. GM had two plants in India – Halol and Talegaon. The
Halol plant was acquired by MG Motor while the Talegaon plant is likely to be acquired by Great Wall
Motors. GM was manufacturing and exporting cars from Talegaon all this while. What was the aftermath of
their decision? There were barely any Chevrolet service centres left, the already poor resale value went for a
complete toss (I sold my Spark for Rs. 80,000/- and Beat for Rs. 70,000/-) and slowly parts availability
started becoming an issue.

It was very sad to see a large automaker quit the Indian market. India’s auto market is the second biggest in
the world and there’s a lot of potential here. Companies need to understand the requirements and sentiments
of Indian buyers and be quick with their decisions because there’s a lot of competition which means good
news for customers and probably bad news for some companies.

GENERAL MOTORS INDIA FAILURE

The Indian auto market is one of the toughest markets in the world. There are so many automakers who still
haven’t been able to crack the market despite selling cars for years. Right now, we will be focusing on
General Motors. GM had a lot of ups and downs in their India journey. They entered India with the Opel
brand and sold cars like the Astra and Corsa. These cars were selling in decent numbers initially but when
people started facing maintenance issues and newer cars from competition came out, sales of Opel fell and
GM had to withdraw Opel from the Indian market.
Then, GM launched the Chevrolet brand in India and offered cars across different segments. You got the
Optra sedan, Tavera MPV and Spark hatchback while newer cars were the Captiva, Beat, Cruze, Aveo,
Enjoy and subsequently the Sail siblings, while the TrailBlazer came and left without anyone noticing it.
GM shut down their domestic operations in India in 2017. Here are 5 reasons why GM failed to conquer the
Indian market.

General Motors Management

A company’s success depends largely on the people running the show and sadly, the management at GM left
a lot to be desired. When I spoke to some people from the industry, they always said that the way of working
at GM is very bureaucratic and people don’t take leadership or their own decisions quickly. What is
interesting is the fact that the company had 9 different CEOs in their 21 year tenure and there used to be a lot
of changes to the corporate structure which is why people failed to follow a proper long term strategy. If my
memory serves me right, Maruti has had just 5 CEOs in the last 35 years.

General Motors Dealership Network

A good product needs to be sold through a good network and a good network needs a good product in its
portfolio. In their good days, GM had 400+ dealerships in India but then a lot of things happened. Their
sales started falling, people were facing issues with dealerships, dealerships didn’t have confidence in GM’s
new products and thus the dealership count went from 400 to 200 with most dealers moving out to different
car brands.

General Motors Customer Service

In 20 years of operations, GM launched more than 20 different models and even withdrew 10 of them. Their
cars were priced from Rs. 3 lakhs to Rs. 30 lakhs. The frequent changes to the model line-up meant that
resale value of GM cars was very poor and with the reliability not being the best, customers had good
reasons to not come back to the brand. If you are a Chevrolet owner don’t get offended because even I
bought 2 Chevrolets and I have first hand experience. In fact, I used to hate sending my car to the authorised
service centre and only stuck to aftermarket garages.

General Motors Technology

Let’s face it, GM cars used to have old platforms and old engines. Barely any car from the portfolio had
modern technology. In fact, there were some GM cars that barely managed to pass emission tests. Quality of
their components only worsened and the long-term reliability of their cars was a big question mark. At the
same time, rivals were churning out new platforms, new engines and better cars.
SWOT Analysis Summary

Strengths- With a brand image that is strongly rooted in American culture , Chevrolet has many strengths
working in its favor. Its parent company, GM, controls the largest share of the U.S. automobile wholesale
market with 19 percent . It also has positive attributes that resonate well with its target market for many of
its vehicles including the Camaro, Impala, Cruze, and Silverado

Weaknesses -While many of its vehicles are doing well and it is a part of American culture, the bankruptcy
and government bailout the company experienced in 2008 and 2009 has hurt its reputation in the eyes of
consumers and the company will need to continue its focus on customer value to avoid such problems in the
future. In addition, there are vehicles in its lineup that Chevrolet will need to innovate if it plans to keep
them on the market

Opportunities -With a growth projected in the industry and low interest rates, (Fuscaldo, 2014) there are
many opportunities in the automotive market. It is essential that companies continue to focus on fuel-
efficiency and a core objective, as this is the demand being made by consumers . In addition, as the world
becomes increasingly global, China is a market that Chevrolet should consider investing resources in, as it is
the largest market globally for automobiles

Threats -The threats to the automotive industry, in large part, center on the high cost of crude oil and the
need to combat this issue. With increased government regulations on fuel efficiency and consumers looking
to decrease to cost of running their vehicles, there is no other option but for companies to focus, at least in
part, on innovations that improves fuel efficiency of vehicles or utilizes alternative energy . Due to this
increased focus, the competition around this attribute is likely to be high. In addition, with the economy still
in a rebound, consumers may still buy a used vehicle over buying new in order to save money

What lessons should be learned from GM failure?

Thus from the strategies, it is evident that Indian market will be only attractive to those who willing to adapt
and develop products which the Indian passenger vehicle market demands. And one thing was clear from
GM strategy; car manufacturers cannot superimpose some other country's strategy in India.

It is very important to understand the basics, basic of what the customer demands, what the market demands
and how the competitors behave to successfully frame a marketing strategy to be successful in the Indian
market.

Recommendation Out of all of these alternatives, it is recommended that Chevrolet focuses on making its
current lineup more fuel-efficient while also looking into expanding its offerings of alternative energy
vehicles. With continued focus on improving the fuel-efficiency of its current lineup, Chevrolet will not only
be satisfying customer demand, but it will also be working towards the fuel-efficiency standards regulated
by the government. With competition also focusing on fuel-efficiency, it would be remise of Chevrolet to
focus elsewhere and fall behind the competition. In addition, with increased government regulations for this
attribute, it is important that Chevrolet invests in the research and development of multiple types of
alternative energy vehicles to combat the high price and scarcity of crude oil . This will also allow Chevrolet
to introduce some of these new vehicles into other markets, such as China, that are interested in alternative
energy

Conclusion

This case is about US-based automaker General Motors Company’s (GM) exit from India and the resultant
complications to its dealers and customers. The move came after GM’s efforts at expanding its market share
in the country failed to gain much traction. GM started on a successful note in India with its Opel cars and
later on with Chevrolet cars but it failed to sustain the momentum due to its lack of consistency in
leadership, brands, and models. The tough competition in the Indian auto car market and the dominance of
Maruti Suzuki and Hyundai in the small car segment only added fuel to the fire. GM was not able to survive
in the Indian market with less than 1% car sales in the country and decided to exit. GM said it would,
however, continue its production in India owing to the cheap cost of production and export the cars to
Mexico and Central and South America. GM’s strategic failure to even moderately succeed in the booming
Indian car market could be attributed to the company’s inability to understand the Indian market and the
customers’ preferences and to make viable cars that suited the Indian market.