General Motors, America’s auto giant, may be losing market in USA, but it is doing well India. Last month (June 2006), it had a 53% rise in car sales. The company sold 3,346 cars against 2,183 in June 2005. Last year, GM sold 30,837 vehicles. GM is now planning to increase its sales up to 2 million by 2010.
At present, General Motor is only selling its Chevrolet models which are the most popular in India. The models include - Chevrolet Tavera, Chevrolet Optra, and Chevrolet Aveo.
The major reason behind GM’s success in India can be contributed to the company’s understanding of the potentials of Indian auto market. I just downloaded a PDF document about GM’s operation in India. There I found out that GM’s strategy was to introduce high end cars with cheaper parts. The strategy worked and the sales margin was very high. In addition, to boost up its business it took following steps:
- Setting up its plant in India and take the advantage of cheap labor.
- Using the Indian talent pool by setting up Research and Development center in Bangalore.
- Tying up with some of the major Indian educational institutions- Indian Institute of Technology (IIT) and Indian Institute of Science in Bangalore.
No doubt, that General Motors has set up and exemplary set of rules for foreign auto producers, who are doing business and those who want to do business in India in future.
Success of General Motors in India proves that this South Asia region is not less potential for the multinational companies to make the best profit. Srilanka, Bangladesh, Pakistan etc can be very profitable market as not many companies have been set up in htis area. So the competition among the companies is not that high and it is an advantage for a new company to take the maximum market very easily. The planning of General Motors is very pragmetic and they could understand the market strtegy of India that can work in other countries of this region.
Thank you for your excellent article.
Posted by: Biplob Kishore Deb | July 4, 2006 9:11 AM | Permalink to Comment