General Motors’ (GM’s) decision to stop selling cars in India this week is driven partly by global compulsions. The company is also exiting the South African market. However, it plans to continue exporting cars from India, will maintain its technical centre, R&D facilities and sourcing. The decision is also a reflection of how GM navigated the Indian market and lost its way. And it is good manifestation of the competitive dynamics in the Indian car industry.It has been a long ride for GM in India. Frequent changes in the corporate structure resulted in absence of a long-term strategy. Started in 1994 with Hindustan Motors (HM) in a 50:50 joint venture, GM bought out HM’s stake in 1999 and went solo. In 2009, thanks to the global economic crisis, the Detroit giant became 50:50 JV with SAIC , its Chinese partner. In 2012 it bought 43% of the Chinese partner’s holding, raising its stake to 93%. With so much going on elsewhere, no wonder GM lacked a coherent India strategy.There were other problems too — starting from the top. The Indian business saw a consistent churn at the top. GM, in over 21 years , had nine CEOs with an average tenure of 2.5 years; in 35 years, Maruti is on its fifth CEO. I always felt that the auto business is a marathon race — like a cricket Test match. GM CEOs played the T20 game. Expat CEOs moved before settling down. Stability at the top is critical.GM was a large MNC with operations in many countries. India reported to its South-Pacific office. It controlled many aspects of Indian operations. The India CEO had to often participate in various committees relating to product, strategy, sourcing and the like. I often joked with the CEO that he spent more time with such chores than with the dealer network in India.All this reflected in lack of consistency in product strategy and marketing in India. GM made a debut under the Opel brand with Astra and Corsa. These were neither big nor small with limited market. Later in 2003 they brought in the Chevrolet brand. Around 2012 they shifted to Chinese models.This did not help in brand-building or customer loyalty. In 20 years they have introduced about 20 models of which 10 were withdrawn. The price tags ranged from Rs 3 lakh to Rs 30 lakh. Frequent launches and withdrawal of models demotivate customers who own such models. It adversely affects not only resale value but discourages buyers for new cars. All this led to a demotivated dealer network. GM’s total sales are about one million units. In 33 years, Maruti has also launched about 20 models, phased out eight with total sales of 13 million.GM’s India decision also reflects the compulsions that MNCs typically face. GM has faced issues, including bankruptcy, since the financial crisis in 2008. Its stock has been stagnating and is facing pressure from investors to show results. These global pressures do weigh heavily on the way MNCs take decisions. Just two years back CEO Mary Barra had said that India is a strategic market and will invest further. The decision to exit now tells you how these pressures are manifesting.It is also a reflection of how tough it is for MNCs to do business in India. India is a unique market. Many MNCs try to replicate their international experience in India with disastrous results. Globally cars are an aspirational product but in India price, fuel efficiency, cost of ownership play an important role. For example, 70% of luxury cars sold are of diesel variant.That Maruti and Hyundai together have close to 65% of the market makes it even more difficult. Most carmakers, like GM, had to undergo a painful experience before falling in line — by producing compact cars. But the lack of range explains their minuscule market shares. Excess capacities have nudged them to export using their international network. Some export more units than their domestic sales.They await more robust growth in the mid segment, SUVs. Many have the resources to wait and see the evolution of the market (but will all be that patient?). Till then they will continue with a mix of domestic and exports, developing R&D facilities, sourcing components.GM has decided to be different and will concentrate only on exports. Will we, like some other foreign companies, see GM return with a new management and more favourable conditions? That’s possible but it will not be easy.(The writer is a former MD of Maruti)(As told to Malini Goyal)