The General Motors bankruptcy issue could have repercussions in India. General Motors, which was world’s largest car manufacturer for a long time is recently relegated to the second position and is in talks with the unions and bond holders to negotiate cost cutting concessions. But bankruptcy seems imminent.
The Indian subsidiary has reportedly suffered drop in sales due to this. According to domestic car industry reports, General Motors India reported a negative growth in sales since the recession started in United States. Currently, GM India sells the Captiva, Spark, Aveo, Aveo U-VA and the Optra through its brand Chevrolet in the country. As the word about the impending bankruptcy grew stronger, car sales plummeted by 25.3 percent. In the same period, industry slowed down by 5.8 percent.
Customers fear that they will be left in lurch of the GM in U.S. goes bankrupt. However, senior Vice President (corporate communications) GM India, Mr. P. Balendran has brushed aside these fears and said that their plans for expansion are on track. There has been no drop in investments for the proposed plans. The decline in sales is due to the impact of global recession. The fear of future is completely baseless.
People remember Korean auto manufacturer Daewoo vanished due to financial irregularities, and was subsequently taken over by General Motors in 2000. The same fears continue to haunt buyers now. India’s biggest GM dealership in Delhi ‘Regent Automobiles’ has stated that consumers do not need to afraid of the impact of U.S. in India. The buyers here will be well taken care and they are in safe hands.