Business - India;GM plans rival to Maruti 800

Pankaj Doval

NEW DELHI: Despite mounting troubles and losses at home, US auto major General Motors will not slow down its planned investments for India and will More Pictures
introduce two new cars next year - the premium Chevrolet Cruze sedan and a new compact car priced under its Spark model, which could become a close rival to Maruti's M800 model in terms of price.

GM India president and MD Karl Slym told TOI that the company, though mindful of the slowdown in the industry, had decided not to defer any of its planned investments for India. The company recently started production at its second Indian plant at Talegaon in Maharashtra and Slym said it will go ahead with an additional $210 million investment for a powertrain facility (engine, gearbox and transmission) at the same location.

"It is a tough environment. But GM believes that India is a crucial and growing market," Slym said. He said GM's sales and stake in the market was on the rise, especially after the launch of the compact Spark, its cheapest offering at a price of Rs 2.66 lakh.

The big plan for GM appears to be the new compact that it plans to roll out from Talegaon. While Slym refused to comment on its pricing, sources said it would be positioned below Spark. This could make it one of the closest rival to Maruti800, the cheapest car in India so far that costs Rs 2 lakh. Sources said the company has already begun the production of the car at Talegaon . Slym said the new compact, though part of a global model of GM, would be tuned for Indian market conditions. "It would be suitably engineered for India," he said.

Slym said more models would include the Chevrolet Cruze sedan, a car that would be positioned over its Optra model to compete with likes of Honda Civic or Toyota Altis. "The Cruze will be strengthening our offering in sedans and is expected to be out in the next 6 months. We are looking at both petrol and diesel options ," he said.

The company will manufacture the Cruze at Halol in Gujarat, its first factory. Asked about expected localisation on the model, he said it could be upwards of 30% to start with. "However , as has been done earlier, we will increase local content with time," he said.

According to figures of SIAM, sales for GM in India grew 7% in the April-September 2008 period at 32,973 units, primarily fuelled by the Spark. To cope with the increased demand for Spark, which offers heavy discounts, the company has started its production at Talegaon too.