General Motors India Failure
The story of General Motors’ failed attempt to enter the Indian car market began in 2004 when it launched the Chevrolet Sail hatchback. GM sold over 2,500 units of the Sail in 2005 and 2006. In 2007, GM introduced the Chevrolet Optra sedan and the Chevrolet Beat compact SUV. Both models weren’t successful either. Then in 2008, GM launched the Chevrolet Amaze small crossover utility vehicle. This model was prevalent among customers and became the best-selling car in India. However, the Amaze was discontinued in 2012 due to poor demand.
In 2011, GM introduced the Chevrolet Cruze compact sedan and the Chevrolet Sonic subcompact hatchback. Consumers well received both models. The Cruze was the most popular car in India, while the Sonic was the second-most preferred car. But things changed in 2013. Sales of the Cruze dropped drastically because of the high price tag. The Cruze cost around Rs. 15 lakh ($2,100). Even though the Cruze was priced reasonably, buyers didn’t buy it because of the high price tag. So, GM had to discontinue the Cruze in 2016.
Then in 2017, GM announced plans to launch the next generation of the Cruze, called the Cruze e20, in 2018. Unfortunately, the e20 never saw the light of day. And in 2017, GM also announced plans to sell the Chevrolet Bolt electric car. The Bolt was supposed to replace the Cruze in the Indian market. However, the Bolt was delayed multiple times. Finally, in April 2018, GM launched the Bolt in India. The Bolt costs around $37,000 and is considered a premium EV.
So far, GM has sold about 7,300 Bolts in India. However, there isn’t much hope for the automaker to make a comeback in the Indian market. With the ongoing rise of EVs and SUVs, GM doesn’t stand a chance against competitors such as Maruti Suzuki, Tata Motors, Ford, Honda, Hyundai and others.
Why did GM fail in India?
There’s nothing better than seeing an innovative product come on the market and fail miserably. General Motors failed spectacularly and took the world by storm when it launched its now infamous Chevy OnStar system. But while OnStar was an ingenious way to make driving safer and improve customer relations, GM’s decision to launch it in India was a mistake.
It’s easy to say that GM could have done better because we’re not Indian consumers. But what makes any company successful isn’t necessarily what it’s best at – it’s what it’s worst at that matters most.
GM failed in India for two significant reasons. First, they had already built cars with local partners who were more familiar with the market in India (in fact, they’d been there since the 1950s). So GM was reluctant to change how they did business. Second, GM sold the same car in India that they sold anywhere else. This made it very difficult for them to find customers.
An excellent example of a business failing to innovate is Starbucks. In America, coffee shops have been popping up everywhere for centuries. Now there are over 20,000 locations across the United States alone. Yet, Starbucks couldn’t do any better here because they didn’t make changes that would set them apart from competitors. You must develop a reputation for quality, price, service and innovation to succeed.
Innovation is hard. When you’re in a crowded marketplace without barriers to entry, it’s nearly impossible to compete. Companies often try to imitate each other instead of innovating. That’s why Apple started out copying IBM. If you’ve ever watched Steve Jobs’ keynote addresses at Macworld, he stressed the point that everyone else was trying to copy him. His strategy worked – Apple became known as “the computer company.”
The second reason GM failed in India is that they treated it exactly like any other country. Their marketing team told me that they were going to focus on the success of their products abroad. However, their main concern was whether or not they’d be able to sell the same product in India as they did elsewhere.
While these decisions may seem obvious, they were the cause of the downfall of General Motors in India. What happened? Well, GM tried to treat India as just another place where they needed to sell vehicles. They even hired a bunch of Indians to help sell cars in India. While this might have seemed like a great marketing move, it hurt their bottom line.
General Motors failed in India because they wanted to stay relevant in developed countries and emerging markets. However, GM didn’t realise that they couldn’t do both. To grow in the developing world, they had to change.
You cannot have a successful business without an effective marketing communication plan. An effective marketing plan allows you to communicate effectively with your existing customers, potential customers, and the media.