GM will sell off the car in South Africa to sell it to Isuzu

General Motors CEO Mary - Bala
According to Detroit Free Press, General Motors on Thursday (May 18 local time) said it plans to stop selling cars in the Indian market, and by the end of this year to withdraw from the operation in the South African market. Analysts pointed out that the move from the side reflects the intention of GM in the global will be poorly profitable business to stop more to focus on better profitability of the market.

General Motors said earlier Thursday that its business in the Indian market will be transformed into a pure export business, in addition to the South African market will be sold to the Isuzu in Japan. The company also said it would sell Chevrolet brand cars in India and South Africa by the end of this year.

Gather profit market

Analysts pointed out that GM hopes to put more financial resources in a profitable market, especially in North America and China market; the other hand, GM will focus on research and development to the field of automatic driving car transfer. As the US auto industry grows for seven years is about to expire, General Motors may need more financial resources to achieve its goals in the future.

General Manager Mary Barra said in a statement: "With the continued transformation of the industry, our business is also changing, the future we will make GM more focused, more self-discipline "We are committed to investing more money in a more profitable business, whereby General Motors is able to take a leading position in core business and in the future of personal mobile traffic."

It is noteworthy that, shortly before General Motors made the statement, the company decided last month to sell its European operations to the PSA group. In 2015 the company also decided to discontinue the mainstream Chevrolet brand models in Europe and exit the Russian market, 2016 General Motors is to stop manufacturing activities in Australia.

For those troubled markets, General Motors has shown a clear willingness to quit. GM has always focused on maintaining its position as one of the world's largest automakers.

"General Motors' recent action clearly reflects that it has been different from the past," said Michelle Krebs, an executive analyst at Autotrader. "Today's corporate management has focused on profitability," said Michelle Krebs, an executive analyst at Autotrader. Not the size of the sales and the market share.If a market outlook for earnings is uncertain and lack of market dominance, General Motors will not hesitate to withdraw.

BRICS market

General Motors is the second car manufacturer to announce a reorganization this week because of declining sales in the US, the pressure on shareholders to pull up share prices and dividends, and the need for large-scale investment in the development of autopilot cars.

Ford announced Wednesday that it plans to lay off 1,400 people in North America and Asia.

The decision to stop selling cars in India is particularly bold. Just a few years ago, most car analysts predicted that the next few years, "BRICs" (Brazil, Russia, India and China) will become the global car manufacturers growth engine.

There is no doubt that China has become the world's largest new car sales market. According to the China Association of Automobile Manufacturers, China's auto market sales in 2016 reached 28 million units, and in 2017 it could increase by 5% to 29.4 million units.

In contrast, due to the Brazilian economy into chaos, while experiencing political turmoil, the country's auto industry vitality dropped significantly.

In India, sales in the automotive industry have been growing. According to LMC Automotive, total sales in the automotive industry grew 20% to 3.3 million in 2016 and is expected to grow 8% in the next seven years to reach 6.2 million by 2025. However, as India adjusted its monetary policy, car sales declined at the end of last year.

General Motors said it will transform its factory in Delaware, Pune, India, into a export center for the Mexican and Central and South American markets and will stop car sales in the Indian market.

GM sold only 29,000 cars in India last year. While General Motors will continue to operate in India's factory, the company will cut 5,000 employees in India by about 8 percent, or 400 employees. "Our export in India has tripled in the past year, which will be our future focus," said Dan Ammann, president of General Motors, in a statement.

Earlier this week, Morgan Stanley's Adam Jonas said in a report that Ford was struggling in India.

"Ford's business in India seems to have dragged down its overall international business and we will seek cooperation or take strategic steps to reduce losses in the region and focus management's attention on more ambitious plans," said Jonas. "

The acquisition of Isuzu

In South Africa, Isuzu will buy General Motors' Portland in Port Elizabeth, as well as GM's remaining 30% stake in Isuzu Truck South Africa, a joint venture.

Isuzu will also purchase the Vehicle Conversion and Distribution Center and control the Parts Distribution Center.

General Motors also said it is working with Peugeot Citroen Group to discuss the sale of GM's Opel brand in South Africa. Peugeot Citroen has previously agreed to acquire Opel brand in Europe.

In a statement issued by a subsidiary of South Africa, General Motors said: "General Motors firmly believes that from a global perspective, GM must have the opportunity in the specific automotive field and market access to higher return on investment, these areas and The growth prospects of the market are very good. "