DETROIT — General Motors executives say they decided to end sales in India because they no longer saw a path to decent profits. But their pessimism about the world's second-most-populous country is more a product of GM's own missteps in India over more than two decades than the market's prospects.
Indeed, plenty of other global automakers — Hyundai Motor, Suzuki Motor, Honda Motor and Toyota Motor, to name a few — have done a better job reading the market and offering vehicles that match consumers' needs and desires. Ford Motor Co. has more than double the market share of GM. Even Fiat Chrysler Automobiles has found a way to sell Jeeps at high markups.
"We think they may have misfired on understanding the customer aspiration for Chevrolet, especially in the last five years," Puneet Gupta, IHS Markit's manager for South Asia automotive sales forecasting, wrote in an email.
GM's latest round of Indian product introductions had sparse amenities, Gupta said, and it had nothing to offer in two of the fastest-growing segments in the country: compact sedans and compact SUVs.
"India is a challenging market, and economies of scale are important to extract the advantages," Gupta said. "Players like Hyundai have been successful for close to two decades and have been profitable, as they have been using India as a global export hub and in parallel are reaping the benefits."
GM's performance in India, which IHS expects to become the fourth-largest vehicle market next year, had gone from mediocre to worse lately. Its market share fell from 4 percent in 2011 to less than 1 percent last year. In 2015, it proposed a $1 billion investment to help reverse its declining fortunes, but CEO Mary Barra and President Dan Ammann, who have been abandoning parts of the globe where big returns aren't on the horizon, ultimately decided GM had worked itself into such a disadvantage that India's potential was no longer worth chasing.