GM Suspends $1 Billion Expansion Plan for India

General Motors Co. is re-evaluating a $1 billion expansion in India and has halted plans to launch an all-new family of small vehicles there.

Jack Uppal, who heads marketing for GM India, tells Reuters GM has dropped a goal of introducing the first of the new models, the Spin MPV, in 2017. The decision does not affect the company’s plans to introduce the Beat Activ mini-crossover and Essentia mini-sedan next year.

A GM spokesperson says the company is conducting a “full review of our future product program in India,” Reuters reports. In the meantime, the spokesperson adds, GM is “putting on hold future investment in our all-new vehicle family in India.”

A year ago GM said it would invest $1 billion to consolidate production in India at its Talegaon factory and shut down operations at its Halol assembly plant. The spending was to be part of a four-year, $5 billion push to develop a family of Chevrolet-brand small vehicles for emerging markets. The vehicles would be built in Brazil, China, India and Mexico.

At the time, GM promised 10 new Chevy models in India by 2020. The company also said India could become a major Asian production hub. Reuters reported earlier that GM might attempt to shift capacity in India and cut back production in South Korea, where the company’s operations have been troubled by labor unrest and rapidly rising costs.