After a dream run with products like the Chevrolet Cruze and Beat in the past, GM has faced a tough run since 2012. And its new President & Managing Director Arvind Saxena says turning things around may well be the biggest challenge of his over-three-decade long career. Despite debuting the Sail hatch and sedan, and the Enjoy MUV in 2013, the company has not seen sales lifting. In fact year-on-year sales are down close to 30% now, and this is on a base in 2013, which was already down over the previous year. Add to that last summer's controversy of falsifying emission data on the Tavera, and GM's reputation isn't quite what it used to be. GM's total accumulated losses in India have piled up to a massive Rs 2740 Cr, and its marketshare has dwindled to just above 2%.
In an exclusive interview to NDTV, Arvind told me that his immediate priority is to get the morale of the troops up. But his larger mandate is to make GM's India business more viable than it has ever been in its nearly-two decade run here. GM does have a reasonably well-populated portfolio, though he agrees that all the vehicles may not be as relevant as some of those offered by his rivals. Of course the need of the hour is a subcompact sedan and SUV - to rival the Swift Dzire and EcoSport respectively. But GM will not be driving in an all-new car till 2017 from the looks of things. The first car may well be the Adra concept shown at the Expo (sub-4 metre sub-compact SUV). So in the meanwhile, the focus is going to be on expanding the Chevrolet footprint across India, and recharging the existing vehicle line-up. Minor facelifts on the Beat and Cruze have recently driven in, and it will be these two cars that will lead that charge.
But keeping its large dealer-community will also be a priority for GM India, and Arvind says he is keenly eyeing a foray into the used car business for the Chevrolet brand. In fact it really remains the last mass player not operating its own in-house used car business, and introducing this would help the dealers find an additional revenue stream, since car sales are down miserably. Enhancing customer experience is also going to be key he told me, to hep repair the damage done to Chevrolet's reputation over the past 2 years.
Arvind has also shared with me that the direct mandate he has from GM leadership in Detroit is to turn things around, and get sales to climb back to the region of 150,000 units annually - and this is the short-term target. In the long run there is a greater expectation. GM has recently appointed ex-VW USA strongman, and former Volvo Cars CEO - Stefan Jacoby as the head of its International Operations which includes India and over 100 other markets in Asia, Africa and the Middle East.
Jacoby has been brought in to strengthen the position of GM in these markets, and India forms a vital part of that plan - given the investments GM has made here since the mid-1990s. When I met Jacoby in February he admitted that GM is not happy with the way things have gone in India ever since the departure of former MD Karl Slym, when the company was seeing an upward trend. He is also the one who shared with me that GM India will not likely have a new model launch till 2017, and that this is less than ideal.
So, improving marketshare and consolidating is the key task Jacoby has set for Arvind and his team. The intent at GM to change its approach to India is clear, since Arvind is the first MD sourced from this market - and not an existing GM executive transported in to head up the operation. He has in-turn asked both the regional and global bosses to stop treating India as an "extension counter", and plan products that better suit the Indian buyers' very specific needs. He has also been promised support, in that the company's working capital requirements will continue to be met by Detroit, despite the losses and the fact that the company has filed with BIFR last year. This filing (unlike a US Chapter 11 filing) is more a matter of regulatory requirement and not a bankruptcy, since GM has showed five-consecitive years of losses in India. GM had bought back most of the stake it had previously sold in its India business to China's SAIC, and though the Chinese co retains 9% stake, its not likely to be increased. Nor is GM India looking at equity infusion from any other possible investor.
GM has a retirement age of 60, which gives Arvind just about 3 years to really implement a turnaround. Making the Chevrolet brand more relevant in this market, will automatically mean a heightened sense of competition, and we all know that consumers benefit from this. So a stronger GM is ultimately a stronger market, because lets not forget it remains in the the world's top three carmakers. Its renewed focus on India, and its intent for India to count as one of its top 5 markets by 2020 is also heartening. So it will indeed be interesting to see how Arvind Saxena's plans pan out, and whether or not he is able to turn the behemoth around in India.
Here's the video of our exclusive interview with Arvind Saxena