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    Thread: 18 years & still clueless: GM India makes Rs 67.5 K loss on every car sold

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      18 years & still clueless: GM India makes Rs 67.5 K loss on every car sold

      MUMBAI: The Indian subsidiary of US auto major General Motors(GM) has run up losses of Rs 746 crore in the last financial year, according to documents the company filed with the Registrar of Companies last week. It sold 1.1 lakh cars last year taking a Rs 67,600 loss on every car sold.

      GM entered India in 1995 and was one of the earliest global car companies to woo consumers post liberalisation. But its accumulated losses have since piled up to Rs 1,598 crore, making it one of the least profitable car companies in India. The losses suggest GM is yet to get its India strategy right after 18 years of trials in India and more than a few errors.

      Ford, its American peer, which entered India after GM,reported losses of Rs 140 crore in FY12 as against 107 crore in the previous year. It has invested $2bn, which includes a billion dollars in its Sanand plant.

      In contrast, Hyundai, the only MNC car maker with sizeable exports and higher indigenisation levels, has seen profits grow from Rs 376 crore in fiscal 2010 to Rs 830 crore two years later. General Motors India's sales are down 20% so far in FY13 and analysts expect the company to report higher losses this year. "The losses (this year) would have aggravated since volumes are falling sharply," said Mahantesh Sabarad, analyst, at Fortune Financials.

      Another big loss this year could see General Motors India's accumulated losses inch up close to about half a billion dollars. The company did not respond to a questionnaire emailed by ET.



      General Motors has so far invested over a billion dollars here, including $500 million in 2012 to expand the Talegaon plant from 140,000 to 160,000 units and engine capacity from 160,000 units to 300,000 units. But poor off take of its products has limited capacity utilisation to only 38%. Idle fixed assets and the interest burden on it is one reason for the mounting losses.

      After starting out with the Opel brand, GM got some traction in the early-2000s when it launched the Optra sedan under the Chevrolet umbrella brand. The multi-utility vehicle Tavera followed a year later, and between 2006 and 2007, the UVA hatch, the Aveo and SRV sub-compacts and the mini Spark rolled out.

      By the end of the decade, when it launched its small car Beat, GM, with eight products at different price-points, had the widest portfolio among the multinationals. But it still hasn't been able to hold its own in the Indian market.

      GM's first batch of models in India, including Astra, Corsa and Optra, lacked a long term strategy and have since been phased out. Newer products have struggled with poor consumer offtake, frequent price cuts leading to a lack of consumer confidence and poor dealer loyalty.

      "GM has not been able to focus on building any particular brand and has not worked to develop a flagship model," said BVR Subbu, an auto industry veteran who has worked with Tata Motors and Hyundai. Even Beat, its largest selling model, only has a 4-6% market share in its segment.

      "The problem lies with the Chevrolet brand which doesn't have a connect with the consumer," adds Hormazd Sorabjee, editor, Autocar India. "GM has compromised its brand by frequent price cuts over the last few years."
      Source : http://economictimes.indiatimes.com/...w/18961932.cms

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      God only knows the facts. I doubt these figures. All these corporates show more losses to evade tax payments to Govt...
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      Extremely shocking but a bitter truth. I thought Spark, Cruze, Beat were alleged "best sellers"? Or that was a clever marketing ploy?
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      Quote Originally Posted by dj.nish View Post
      Extremely shocking but a bitter truth. I thought Spark, Cruze, Beat were alleged "best sellers"? Or that was a clever marketing ploy?
      Cruze was the best selling in the segment, till the Elantra came. Since then Cruze is barely selling. Elantra has now taken over the market leader segment.
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      The losses of any automobile manufacturing company does not just reflect the sales figures. Even if cruze or beat is selling, there are other liabilities on GM, assets, overheads expenditures etc etc which are accounting for the losses.
      The only people who really have a problem with FIAT are the ones who never owned it.

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      Quote Originally Posted by Italia-Linea View Post
      overheads expenditures etc etc
      Probably they are still reeling under the debt of Daewoo financials
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      If GM is standing at that figure, FIAT should be somewhere close by
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      Quote Originally Posted by Praful View Post
      If GM is standing at that figure, FIAT should be somewhere close by
      Untill and unless TATA and Suzuki dont go down, Fiat wont

      They sell engines
      The only people who really have a problem with FIAT are the ones who never owned it.

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      Quote Originally Posted by mclaren1885 View Post
      Cruze was the best selling in the segment, till the Elantra came. Since then Cruze is barely selling. Elantra has now taken over the market leader segment.
      Is Cruze in the same segment as VW Jetta, Hyundai Elantra, Skoda Laura? How does it compare with competition?
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      Quote Originally Posted by Supernaut View Post
      Is Cruze in the same segment as VW Jetta, Hyundai Elantra, Skoda Laura?
      Yes!

      Quote Originally Posted by Supernaut View Post
      How does it compare with competition?
      If we are comparing only diesels.

      Engine Performance - Chevrolet Cruze (old one)- Jetta - Laura - Elantra in that order. The VW and Skoda come with DSG.
      Handing - Jetta - Laura - Cruze - Elantra.
      Ride Quality - Elantra - Jetta - Laura - Cruze.
      Interior Quality - Jetta - Laura - Elantra - Cruze.
      Interior Styling - Elantra - Cruze - Jetta - Laura (this doesn't indicate quality of plastics). Cruze has the worst plastics in the segment.
      Exterior Styling - Depends on individual.
      A.S.S - Hyundai - Chevrolet - VW - Skoda.
      2002 Tata Indica DLS.
      2004 Suzuki Zen - A G13B eater.
      2005 Suzuki Baleno - India's fastest Naturally Aspirated Baleno timed on a drag strip officially!
      2008 Suzuki Swift VDi - The Rattle King.
      2011 Chevrolet Cruze - The Torque Monster.
      2016 Ford Ecosport 1.5 TDCi Titanium - The SQ Machine in the making.
      2017 Skoda Octavia VRS - A 400+HP corner craving machine!
      2013 BMW X1 - The RWD Sideways Machine
      2019 Polo GT TSI - The Commute Workhorse.
      2014 MOC SQ Pro Champions.
      Harmonixx Tuning - Importers for Audiofrog & Arc Audio/APR Tuning Authorized Dealers/Engine Remap Specialists for all makes/models.
      Dealers for Rainbow/Mosconi/Eton/Stetcom/Tru Technology/Blam Audio/Mobridge/Stetsom/Audible Physics/AIV/Gladen/Dampmat/Dr Artex Damping and more.

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