The Indian branch of General Motors (NYSE:GM) has recently announced its new pricing strategy. The company intends to increase the prices of its cars from 5000 to 20,000 depending upon the car model. The new strategy will be put into action on January 1st 2015. According to Mary Barra who is also General Motor’s first woman CEO, lately announced that the company is using a dedicated focused strategy in the Country.
According to her, the company is focusing on the future operations. She seems optimistic about the company’s future dealings in the market when she was asked about the market decline of GM in India. GM in India currently only holds almost 3% of the market. This does not go with the GM’s global image. The Vice President General Motors (NYSE:GM) P. Balendran says they have taken this step to accommodate the increasing cost pressures.
The cost pressure does not only stem from the increasing supplier costs but also costs set by the competitors. The company also has to compete against the international giants like Toyota, Honda (NYSE:HMC), Volkswagen, and with the local giants like Maruti Suzuki and TATA. Reports have also indicated that for the same reasons companies like Maruti Suzuki, Hyundai, Honda (NYSE:HMC) have also been thinking deeply of increasing their prices because of the increased raw materials and logistics expenses.
The company in November faced a decline of 36% and sold only 4,157 cars as compared with the 6,214 cars sold in the same month of the last year. According to the market analysts and researchers something is definitely not right with the General Motors (NYSE:GM) India. However the Company on the other hand for boosting its sales in December has come up with a new strategy. The company intends to increase their marketing efforts by offering more exciting offers and benefits on purchase of all the cars except for the sports utility vehicle captive.
The offers include customer loyalty bonuses, product discounts, corporate discounts and exchange bonuses ranging between 55,000-85,500. The company is already working to increase its market segments in which production of Sedan is included. The company is also going to come up with an entirely new strategy in which it will increase its extra focus on exporting its products and the expansion of General Motors (NYSE:GM) market.
According to a report of the Economic Times that General Motors (NYSE:GM) has already started the production of Sedan which is given the code name of MCM and is expected to come to the market in early 2017 alongside with another major achievement of General Motors (NYSE:GM) which is the next generation beat hatchback. According to the Economic Times reports the company has already been exporting the beats to Chile and is determined to further expand its Global market.
The main reason according to the experts is the major decline in General Motors (NYSE:GM) domestic market. Therefore Company has now shifted its entire focus on the international market.