GM Abandons Car Markets in India, South Africa

General Motors Co. is phasing out local-market activities in India and South Africa.

The moves will enable the company to divert resources “on winning in the markets where we have strong franchises and see greater opportunity,” says President Dan Ammann. GM, which will book a $500 million special charge in the current quarter, expects the restructuring will save $100 million annually.

GM will continue building vehicles at its plant in Talegaon, India, for export only. The company notes that shipments of its Chevrolet Beat small cars from India to Mexico, Central and South America tripled last year. Global product development operations at a GM technical center in Bengaluru are not affected.

GM finalized a deal in April to sell its second factory in India, located in Halol, to Chinese carmaker SAIC Motor Corp. GM production there ended on April 28. The Talegaon and Halol facilities have annual capacities of 110,000 and 150,000 vehicles, respectively. But last year GM sold fewer than 29,000 vehicles in India.

In South Africa, GM will transfer its local manufacturing operations to longtime partner Isuzu Motors Corp. The carmaker’s Chevrolet brand will be phased out in both markets by the end of 2017. Isuzu will acquire GM assets that include the company’s Struandale assembly plant and vehicle conversion facility. Isuzu also will take control of GM’s parts distribution center in South Africa, which will continue to support local Chevy and Opel customers.

Separately, Isuzu will absorb GM’s 30% stake in the Isuzu Truck South America joint venture. GM also is selling its 58% stake in GM East Africa to Isuzu and pulling Chevrolet out of that market.

Finally, the company says its GM International unit will shrink and streamline its regional headquarters in Singapore. That office will continue to provide strategic oversight for continuing businesses in Australia, New Zealand, India, Korea and southeast Asia.