General Motors' India departure will 'limit' Manchester United's jersey deal engagement
Post demonetisation, the sales ride has been quite a bumpy one for passenger vehicle buyers. General Motors, after ceasing its Halol plant (in Gujarat) in April, is now set to bid farewell to the Indian market. The reason being poor sales.
General Motors to bid farewell to India: a blow to the Manchester United FC Jersey deal
In a press release Stefan Jacoby, executive vice president and president of GM International, said: “We explored many options, but determined the increased investment originally planned for India would not deliver the returns of other significant global opportunities. It would also not help us achieve a leadership position or compelling, long-term profitability in the domestic market. Difficult as it has been to reach this decision, it is the right outcome to support our global strategy and deliver appropriate returns for our shareholders.”
General Motors' exit also will have huge repercussions at Old Trafford, the home of Manchester United Football Club. GM is the official shirt sponsor for Manchester United FC and, in the past, has carried out numerous events for them to engage the Indian fans. With over 35 million fans in India, Manchester United FC will have to explore more options in the Indian market.
The Drum spoke to Adrian Wright, chief executive of leading sport marketing company Sporting Group International who, said: "The news of General Motors, the owner of Manchester United's shirt sponsor Chevrolet, pulling out of retailing its motor vehicles in India has come as a surprise, but with only 29,000 cars being sold last year, it is evident why based on the market available. This move replicates a decision made only weeks after putting pen to paper by signing the deal with United in 2014, when they announced they were pulling out of Europe. I am sure there have been questions asked internally about how well they have utilised the association with the world's most recognised football club in markets with exceptional support. Pulling away from these markets will enviably lead to limited engagement opportunities for United fans and the club's principal sponsor".
General Motors will not exit entirely from India as it has found solace in export. They have converted their Talegaon plant in Maharashtra into an export hub, which exports to Mexico and a few other Central/ South American countries. Furthermore, It is negotiating with Shanghai Automotive Industry Corporation of China, its JV partner in China, for a possible sale of the plant as the Chinese company is looking to enter India.