General Motors Co. and Ford Motor Co. have a combined market share in India of around 6.5% (which is on a declining trend). These are particularly poor showings, considering that they entered the market in India nearly 20 years ago. Researcher Intelligence Automotive Asia said that GM’s sales in the third-largest automobile market in Asia have fallen by 17% in the last 10 months while Ford's deliveries are down by 8.4%.
GM and Ford continue to be hopeful but they face increasing competition from Toyota Motor Corp. and market leader Maruti Suzuki India Ltd., which produces 4 in 10 cars sold in India. Analysts believe that the U.S. automakers failed to do well in India because of their high prices and poor service.
India is a significant market since it’s estimated to surpass Japan as the No. 3 passenger-vehicle market in the world this decade. The U.S. automakers are increasing efforts to be of service to Indian motorists but they haven’t yet proven that they can still be relevant.
Deepesh Rathore, a managing director for researcher IHS Automotive in New Delhi, said that GM and Ford have “not been able to understand the market.” He explained that they haven’t provided training for their dealerships and the competition has become more intense.
The Hyundai Verna has outsold the Ford Fiesta four-to-one. It can be recalled that in July 2011, Ford introduced the newest Fiesta sedan model and priced it at 823,000 rupees ($15,120), making it almost 20% more expensive than the comparably sized Verna. It was in 1994 that GM entered India. Back then, it was in a venture with Hindustan Motors Ltd. They sold the sedans: Opel Astra and the Corsa and Vectra in a market that prefers hatchbacks. In 1999, GM bought out Hindustan Motors' stake in the venture.