Losses pile up for General Motors, Ford, Honda

American car manufacturers General Motors and Ford are struggling in India. The two companies together have accumulated losses of more than Rs. 4,500 crores in the country.

General Motors and Ford have been present in India for almost two decades now. However, they have struggled to compete effectively with the likes of players like Maruti Suzuki, Mahindra and Hyundai.

General Motors, which was for many years the world's largest car maker in the world, has recorded losses of Rs. 746 crore for FY 12 and Rs. 1,142 crore for FY 13, taking its accumulated losses till date to Rs. 2,740 crore. The company claims that the reason for the dismal showing is the unavailability of its bread-and-butter model, the Tavera MUV in the first quarter of 2013. Additionally, General Motors also phased out its ageing Aveo and U-VA models.

Ford has recorded losses of Rs. 140 crore for FY 12 and Rs. 420 crore for FY 13, which takes its accumulated losses till date to Rs. 1,740 crore.

It is not just the Americans whose losses are piling up. Japanese auto major, Honda recorded losses of Rs. 604 crore for FY 12 and Rs. 1,110 for FY 13. The company's accumulated losses stand at Rs. 1,369 crore.

Most manufacturers have invested heavily in capacity and have not yet started benefiting from the investments. Additionally, the economic slowdown has played its part in increasing the losses. In FY 13, automobile sales dipped by 6% compared to the previous fiscal.

While General Motors, Ford and Honda are struggling, Korean manufacturer Hyundai is seeing its profits grow. The company reported a net profit of Rs. 1,025 crore for the FY 13, a jump of 23% from the Rs. 836 crore profit of FY 12. Market leader Maruti Suzuki and Mahindra have reported profits of Rs. 2,300 crore and Rs. 3,353 crore, respectively. Maruti, Hyundai and Mahindra have a share of 65% of the Indian automobile market, which is considered to be the sixth-largest in the world at the moment.

Source: Financial Express