General Motors, the largest US automaker and the third biggest in the world believes its Indian unit would turn to positive financial results within five years, according to the local leader of the division.
Profitability in India would be reached within the upcoming five years through cost reductions and the extensive drive to rise the locally produced content of the vehicles being sold in the country, commented GM’s India Managing Director, Arvind Saxena. General Motors has been present for two decades in India but the company has failed to stop bleeding money and currently the sales are on a descent – the loss during the past financial exercise was of around 38.5 billion rupees ($581 million), according to a filing with the corporate affairs ministry. The carmaker announced back in July it was going to spend $1 billion in India to transform the country into a worldwide export hub and deliver new models even though production output is actually trimmed to make up for the lowering demand.
“In the next five years, I should definitely make it to a green balance sheet,” commented Saxena, adding the company wants to source more parts locally and also base its engineering there for the upcoming half decade – aiming for 70 percent localization from a much lower base today. According to industry figures, while in the year to the end of March passenger car sales in the country rose by five percent, global peers such as Renault, GM, Volkswagen, Skoda or Ford all had double-digit drops.