GM looking for growth in India, China car markets

GM looking for growth in India, China car markets

Agence France-Presse, New Delhi

U.S.-based General Motors Corp., the world's biggest automaker, said on Monday the firm was looking at growth in India and China's car markets to ride out the industry's tough times.

"As one of the fastest-growing vehicle markets, India and China hold tremendous promise for us at a time when there is a global slowdown," Aditya Vij, president of General Motors India, said at the launch of the firm's Chevrolet Optra luxury sedan.

"By launching new cars in quick succession General Motors is strengthening its presence in these two Asian markets where there is a rapidly expanding number of people who can afford to buy a car," he told reporters.

General Motors plans to ramp up its investments in its factory in Halol in the western Indian state of Gujarat to build and sell the Chevrolet Optra in India.

"We will end up spending 13.8 billion rupees (US$294 million) by the end of this year in manufacturing and selling the midsize Optra in India. We hope to sell 1,000 to 1,200 sedans every month," said P. Balendran, spokesman for General Motors India.

"By making India among the first countries in the world to build and sell the Chevrolet Optra, General Motors is demonstrating its faith in this market," he added.

Analysts said the monthly sales in the higher-priced C-segment total around 10,000 cars for all companies.

Currently, General Motors has a share of about two percent of the entire Indian car market and about eight percent share of the bigger, mid-sized car segment.

Auto analysts said that General Motors had under-priced the Chevrolet Optra at 789,000 rupees in order to grab market share from its Japanese rivals.

"The Optra is a fully-loaded car and a sight cheaper than other cars in the C-segment like the Toyota Corolla, Mitsubishi Lancer and other Honda-make cars," said car analyst Pradeep Sarkar.

Earlier this year General Motors India's Vij said the company was hiking its annual output capacity from 8,500 cars to about 50,000 cars within three years in its factory in Halol, taking its total investment in India to 16 billion rupees.

While General Motors entered India by launching the luxury Opel Astra, its competitor Hyundai gained sales volumes by targeting the small car segment with its Santro model.

Analysts say a strong bet for General Motors could be to tap into the products of its Asian joint venture partners to launch cars in the cheaper and bigger volume car segments.

General Motors' 20 percent equity stake in Japan's Suzuki Motor Corp., which owns India's largest car company Maruti, could help it improve its market share by increasing its distribution clout.

General Motor's takeover of South Korea's Daewoo Corp. operations could also help as the company's small Matiz car is popular in India.

However, it has not acquired the Korean company's Indian operations.

During the three months to May, the Indian automobile industry grew between 36 percent and 40 percent, according to industry figures.