Since the past couple of months, various reports had been flooding the Internet regarding General Motors’ (owners of the Chevrolet brand) plans to quit the Indian market. However, everyone in the industry believed these reports to be mere rumours. Chevrolet had been testing the new Beat 2017 facelift and the Essentia compact sedan in India from the past 1 year. Hence, every market expert thought that the carmaker is still prepping new products for India and thus an exit seemed unlikely.
However, General Motors decided to take everyone by shock. The American carmaker officially announced its exit from the Indian passenger car market yesterday. A final date to mark the end of Chevrolet’s road in India hasn’t been revealed. However, the company has said that it will cease all product sales in India by the end of this year.
With this announcement, various questions started flooding in. Why did Chevrolet decide to leave India? Was the decision taken overnight? What will happen to existing owners? How many jobs will be affected with Chevrolet’s exit? What will happen to the dealers? Well, we talked to various people within the company and at multiple company dealerships in order to find answers to these questions.
Hence, here’s everything you need to know about Chevrolet’s decision to end car sales in India.
Why did Chevrolet leave India?
Chevrolet has been present in India for over 2 decades, i.e., more than 20 years. The company had some very good successes in the country. The best one was the Tavera MPV. The Beat, Spark and Cruze too managed to rope in significant sales numbers in their initial days. So what happened that led Chevrolet in a condition where it had no other option than to call it quits?
The primary reason behind Chevrolet’s farewell in India was the dropping sales chart. At a time, Chevrolet used to have a market share of around 10%. However, in the month of April 2017, the company’s share was just 0.32%. This resulted in huge losses. But how did the sales drop so rapidly?
In order to answer this question, let us mention the timeline of some of the Chevrolet cars in India. The Tavera was first launched in 2004. And till date, it has been sold in the country without any major changes. The Spark came in 2007, and continued its sales run for a decade with no changes to talk about. A similar delay in bringing updates of existing models was seen in the case of the Beat hatchback and the Cruze sedan. All this happened in a market that was constantly seeing new launches in each and every segment from a wide range of carmakers.
This resulted in the company’s portfolio looking old and thus losing its desirability factor. Additionally, the new models brought by the company, including the Sail and Sail U-VA were simple Chinese rip-offs. They lacked any competitive characteristic and were priced exorbitantly. Despite having the updated Cruze and Beat in the international markets, Chevrolet decided not to bring those models to the Indian market (god knows why).
All this led to Chevrolet becoming a redundant automaker in India, with most customers not even considering the company’s models while looking for a new car.
Was the decision to quit India taken overnight?
This question becomes all so important because even dealerships were not aware of any such decision being taken at the upper-level management. General Motors India’s President and CEO, Kaher Kazem, said that the decision was finalised just recently and the company made it public as soon as possible.
Do we believe his statement? To be frank, absolutely not! General Motors is one of the world’s largest automaker. It isn’t any roadside general store that suddenly decides to shut shop due to rising operating costs. Quitting a rapidly emerging market like India mandates various research studies and analysis reports. General Motors officials clearly knew that such a decision was in the pipeline from at least a couple of years. Hence, they indeed are guilty of hiding facts, not only from customers, but also from their own employees and dealer partners.
We would not hesitate to go a step further and even say that Chevrolet, in a way, tried to fool around and indicate that the company will be present in India for a longer run. Remember the $1 billion dollar investment that General Motors boss Mary Barra promised during her visit? And those multiple spy shots of the new Beat and Essentia testing under camouflage on public roads in India? All this was never meant to see the daylight and were simply Chevy’s attempts to mislead Indian buyers and dealership partners.
What will happen to existing owners?
Chevrolet has suggested that it will continue to provide service and spare part-related support to its existing customers. The warranty packages will also be in place and customers will be able to take all listed benefits. However, the company hasn’t mentioned how this arrangement will work out. Will the service centers remain open in all cities? Or will Chevy partner with some other manufacturer to provide service needs? These are questions that are still left unanswered.
Anyways, there are always third-party multi-brand service outlets available for regular servicing needs. Moreover, all popular Chevrolet models (Tavera, Beat and Cruze) have sold in enough numbers to keep vendors interested in supplying spare parts for the next 3-5 years. So if you are an owner of a Chevrolet car in India and the car is working without any issues, it would be wise enough to keep using the car for around 3 years. This will give you enough time to save money for the next upgrade.
It must be noted that prices of Chevrolet cars in the used car market will experience a sudden downfall due to the news. This makes it more practical for existing owners to stick to their vehicle for as long as they can in order to offset the overall depreciation.
What will happen to Chevrolet India dealerships in the future?
Starting a dealership requires significant investment from the dealer owner. Moreover, each dealership continues to buy new cars from the company to keep sales running. Since Chevrolet dealers didn’t know anything about the company’s decision to leave India, they continued to stack up stocks. However, sales are now bound to drop as news about the company’s exit spreads. This will mean huge losses for the Chevrolet dealers in the country.
We talked to some of the dealerships and came to know that they are still discussing the future plans with Chevrolet. The company might buy back existing stocks from dealerships to minimize losses to its dealer partners. Moreover, Chevrolet and some selected dealerships are also working on an agreement under which the dealer will continue to operate its service centre, even when the display area and sales operations have shut down.
How many jobs will be affected by Chevrolet’s India exit?
The company claims that around 400 people will be affected due to its decision to leave the Indian market. However, the actual figure will likely be much higher as various people at dealers, service centres, marketing and logistics will also be losing their jobs.
All in all, Chevrolet’s decision to quit the Indian market is indeed a sad state of affairs for the existing owners, dealerships as well as employees. However, it will likely help General Motors to enhance its profitability as a global unit. We all knew that Chevrolet won’t be able to make a mark in the Indian marget, especially due to their lethargic approach. However, no one had the faintest idea that the announcemnt will come so soon and abruptly.