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GM Re-Evaluates India Investment, New Car Platform on Hold

General Motors is re-evaluating its planned $1 billion investment in India and has put on hold moves to bring a new car platform to India as it re-assesses its strategy in the country, according to company officials.

The rethink comes as GM’s India sales have fallen nearly 40% in the year to end-March, and its share of the domestic passenger vehicle market is now below 1%. Sagging sales and a regulatory crackdown on diesel-powered vehicles are now forcing GM to redraw plans.

GM’s original $1 billion plan included, among other things, the launch of a multi-purpose vehicle Spin and a new modular platform, designed to build low-cost cars for emerging markets.

The new platform would have helped GM price cars competitively in a market like India where buyers prefer low-cost cars and which is dominated by Maruti Suzuki India and Hyundai Motor.

Instead of launching the Spin MPV, GM is focused on bringing a compact SUV to India soon, said Uppal, adding GM still plans to launch small cars like the Beat Activ hatchback and Essentia compact sedan in 2017, as it attempts to bolster sales.

GM is not the only foreign automaker battling to crack India’s passenger car market forecast to be the world’s No 3 by 2020. Volkswagen, Nissan and others have struggled to significantly raise market share in the price sensitive Indian market.

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