Sources have stated that in a world where major automakers are losing their minds about the potential of the fast-growing Indian market, it's a refreshing change when a big player puts on its green eye-shades to take the contrarian view and that's the approach of General Motors Co., whose Chief Executive Officer Mary Barra is scrapping a $1 billion investment in India and halting sales of Chevrolet models there altogether.
It was stated that thin profit margins in the market overwhelmingly dominated by Maruti Suzuki India Ltd., with a 47 percent share could weigh on GM globally for years to come, she told Bloomberg Business Week's, David Welch and it takes guts to quit a market that's expected to be the world's biggest in about four years, but the automotive sector is currently the least-loved in the S&P 500. Barra's focus on profitability is the sort of bold move that might inject a bit of spine into those limp valuations. Nonetheless, she's making a mistake.
Without the doubt, Maruti Suzuki's size presents a
fearsome obstacle to new entrants. It's close to impossible to take on such a
dominant player without undercutting it on margin, and Maruti's operating
profits have averaged 9.3 percent of sales over the past 10 years pretty much
in the middle of the 9 percent-to-10 percent range that Barra wants to achieve
company-wide by 2020. Almost by definition, GM could only grow in India by
giving up profitability on a global scale.
Currently Volkswagen AG now counts China as its biggest region, with more than a third of deliveries. It's looking to repeat the trick in India, announcing a partnership with Tata Motors in March. The other two 10 million-cars-a-year automakers are heading in the same direction, with Toyota Motor Corp. last year partnering with Suzuki Motor Corp. to give it an entree with Maruti, and the Renault-Nissan Alliance building on its tie-up with Mitsubishi Motors Corp.
Cess on Automobiles, Rubber been abolished New Delhi sources have stated that to ensure smooth roll out of Goods and Service Tax, the Central Government has abolished cesses on goods and services included in the last three General Budgets viz 2015-16, 2016-17 and 2017-18, and starting from July 1, 2017 with GST in place the government will also abolish cess on automobiles. Through Taxation Laws Amendment Act 2017, The Industries (Development and Regulation) Act 1951 Cess on Automobile will no longer be applicable.
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