jagdish khattar
General Motors’ (GM’s) decision to stop selling cars in India this week is driven partly by global compulsions. The company is also exiting the South African market. However, it plans to continue exporting cars from India, will maintain its technical centre, R&D facilities and sourcing. The decision is also a reflection of how GM navigated the Indian market and lost its way. And it is good manifestation of the competitive dynamics in the Indian car industry.
It has been a long ride for GM in India. Frequent changes in the corporate structure resulted in absence of a long-term strategy. Started in 1994 with Hindustan Motors in a 50:50 joint venture, GM bought out HM’s stake in 1999 and went solo. In 2009, thanks to the global economic crisis, the Detroit giant became 50:50 JV with SAIC, its Chinese partner. In 2012 it bought 43% of the Chinese partner’s holding, raising its stake to 93%. With so much going on elsewhere, no wonder GM lacked a coherent India strategy.
There were other problems too — starting from the top. The Indian business saw a consistent churn at the top. GM, in over 21 years , had nine CEOs with an average tenure of 2.5 years; in 35 years, Maruti is on its fifth CEO. I always felt that the auto business is a marathon race — like a cricket Test match. GM CEOs played the T20 game. Expat CEOs moved before settling down. Stability at the top is critical.
.. 
No comments:
Post a Comment