US auto giant General Motors Co. will stop selling its Chevrolet vehicles in India but the world’s third-largest carmaker will continue to manufacture and export cars from the country, sources close to the matter.
The decision was announced as part of a series of restructuring actions from the Detroit automaker on Thursday, and marks a significant blow to India's strategy of encouraging domestic manufacturing.
GM says it would no longer market its Chevrolet brand - its only brand of cars marketed in India - despite India's promise as a market set to overtake Japan as the world's third largest in the next decade. But it doesn't plan to leave India entirely.
It plans to keep operating its tech center in Bangalore and to refocus its India manufacturing operations by making one of its two assembly plants in India - the one at Talegaon, about 100 km (62 miles) southeast of Mumbai - into an export-only factory. It plans to sell the Halol plant in the western Gujarat state to Chinese joint venture partner SAIC Motor Corp.
"We are not giving up benefits India offers as a local cost manufacturing hub with an excellent supplier base which is extremely competitive," Stefan Jacoby, GM's chief of international operations, said in an interview.