General Motors ties up with Amazon as it seeks turnaround in India

General Motors ties up with Amazon as it seeks turnaround in India

General Motors ties up with Amazon as it seeks turnaround in India

Written by Staff Writer

22 Oct, 2015 | 11:36 am

General Motors, struggling to make its presence felt in one of the fastest growing automobile markets globally, announced on Wednesday, October 21 a tie up with online retailer Amazon to launch its sports-utility vehicle, the Chevrolet ‘Trailblazer’ in India.

General Motors made the announcement of the tie-up at an event to launch the premium segment SUV in Gurgaon, on the outskirts of the Indian capital New Delhi.

The six-speed automatic transmission Chevrolet ‘Trailblazer’ is the first vehicle out of the General Motors stable in nearly two years for the Indian market and the company hopes to launch 10 models over the next five years as it pushes to double its market share in the south Asian nation.

The full-sized SUV Chevrolet ‘Trailblazer’ will be available at the price of 26.4 lakh rupees (USD 40,473.23) in showrooms.

The bookings on Amazon’s India website will go hand in hand with traditional bookings through dealerships. Customers can book with an initial payment of 25,000 rupees (USD 383.26) that is refundable in case they change their mind.

The American automaker believes that tapping e-commerce, which has a large consumer-base in India, is a first-in-its-kind to boost sales.

“I think it is a very good opportunity for us to get to a customer when he is in a buying mode. I think there are millions of customers at it every day. So just that you are able to connect with so many customers; it’s a very strong media especially when you are connecting with people who are in the buying mode. That’s what we are trying to do. We thought this is where we would get a very large exposure, very quickly with our customers,” said GM India President and Managing Director Arvind Saxena, though adding that e-commerce could not totally replace traditional dealerships.

The tie-up between carmaker and online retailer comes as a win-win for both parties with Amazon India saying, though buying vehicles was a more ‘touch-and-feel’ experience, launching the ‘Trailblazer’ on its site would mean further expanding their already 25-million strong product service.

“We are a large player in this market segment. We have millions of consumers who are coming online who are a great audience for these car makers, for all the car makers in India. So we believe it’s a good segment that we have and they are coming online to us. Over the past two and a half years we have built a great product and great service for those consumers. So we believe the opportunity is there,” said Vice President, Category Management, Amazon India, Samir Kumar.

Amazon India could also relay customer reviews – what the consumer looks for in an automobile; which locations in the country show the most demand – to the carmakers, Kumar said, for what he thought was an important take-away for GM.

By 2020 analysts expect India to become the world’s third-largest passenger vehicle market after China and the United States.

Earlier in June this year, General Motors Co had said it will invest $1 billion over the next few years to turn India into a global export hub, even as it cuts production capacity in the country due to sluggish demand.

The Detroit carmaker, which has the capacity to produce more than 280,000 cars a year in India, will reduce this to 220,000 a year by 2025 as it stops making cars at one plant and modestly raises capacity at its second plant in the country.

In spite of having spent nearly two decades in India, GM has failed to crack the code and is still losing money. GM lost 38.5 billion rupees (USD 604 million) in India in the year to March, a company filing with the corporate affairs ministry showed.

But the company said it is ready to turn a new leaf in its business now.

“We are doing everything differently now; in fact we are not doing anything what we did for the last 19 years. We have started export, which we didn’t do for the past so many years and we are ramping up very soon. We are getting a very aggressive plan of 10 models in five years. We are consolidating into one location to bring more sustainability to our business. So there are many things. We have restructured our organisation to that extent. So there are a lot of things which are very different from what we did, and I think that’s what makes us confident that we should be able to turn around our business here in India,” said Saxena.

GM India’s investment is part of its plan to invest $5 billion over several years to develop a global family of Chevrolet vehicles with Shanghai Automotive Industry Corp (SAIC), the state-owned Chinese automaker.

GM has two plants in India, one in Gujarat state and the other in Maharashtra that together can produce more than 280,000 vehicles a year. The Gujarat plant, with a maximum capacity of 110,000 vehicles a year, will shut by mid-2016.

In 2014, GM sold 56,700 vehicles in India with a market share of 1.8 percent.

(1 USD = 65.22 INR)

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