General Motor's decision to exit from India is unlikely to impact the industry due to the insignificant volume of vehicles the company manufactured in the country.
The company holds mere 0.32% market share.
Abdul Majeed, partner - PwC India, and an auto expert, said there will be practically no impact of the decision on the industry as the volume has been very low for the company.
"The company's marketing and product strategy did not align with the local market," Majeed said, adding, " The dynamics of business have been continuously changing in India in past few years. For example, there is a trend in demand for compact SUV and crossovers. But GM does not have many such products to offer in its portfolio. Look at how Maruti, Renault, Hyundai and Toyota are doing business, even as the market hots up. "
According to the experts, GM did not have an India-specific market strategy. It mostly followed its global style of functioning even though the market required them to go local. The automobile companies which have been successful in the country are the ones that have adopted themselves as per the local requirement and catered to the market by bringing innovation as well as cost effectiveness at the same time. India, which recently crossed the 3 million, may see its sales figures growing from the current 7-8%. The auto sector is a major source of job creation, accounting for about 29 million direct and indirect jobs in the country, and contributes around 7.1% nation's GDP.
Even Arun Agarwal, DVP – research at Kotak Securities, agrees that there would be no impact on the industry as GM hardly has the volume numbers to matter in the scheme of things. He goes on to add, "In the last over 4-5 years, the Indian market has grown on the back of slew of new launches. GM did not have much to offer in its product portfolio despite having been in the business (in India) for a very long time"
An executive from rival automobile company said that a player needs to be ahead of the curve to be successful in the industry; it should not only have the right marketing and product strategy, but also after-sales service. "GM, however, was not getting it right since quite some time, and the competition was getting aggressively fierce" the executive added.
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