GM India: An Optimistic Outlook
In the midst of news of GM filing for bankruptcy earlier this week it was reassuring to see that GM India was cast as part of the new “good GM” and seen as a separate entity from its ailing parent. This is good news for those in the GM India supply chain. GM India for its part has to secure funds on its own since the bankruptcy.
The company has plans to raise $200 million for a new engine factory and another chuck of change for a powertrain plant among other things. The company is confident of raising the money according to Nick Reilly, President of GM Asia Pacific. GM also has plans to roll out five new models in the next two years. GMI is planning to launch two cars in the Spark segment to tap into the compact car segment which is the domain of Maruti (WagonR and Ritz) and Hyundai (Santro). GMI also has plans for a sedan (Cruze) based on the Optra platform. The Tavera is also slated for an update. The company also has plans to tap into the CNG and LPG alternative fuel vehicle market.
Three autoparts makers, working closely with the company for the new cars, said two cars will be launched as per schedule this year, and that GMI has asked them to adhere to the deadline for delivery of critical components. “While the company has sufficient funds to roll out new models for this year, there could be uncertainty over the new small car and other products next year,” a Delhi-based vendor said.
All of this could be an elaborate PR effort to shore up consumer and supplier concerns. It is yet to be seen on where the company plans to find finance sources. Adding to the barage from the GMI public relations machine was news that mentioned plans of offering a Rs 4 lakh small car by the end of 2009. General Motors India President and Managing Director Karl Slym told reporters that the small car, which will be developed on GM’s concept car Beat platform, is to be manufactured exclusively at GM India’s Talegaon facility for serving the domestic as well as export markets.
“As of now, the mini car will be manufactured in Korea and India. From India, we are also planning to export to the Asia Pacific region and European countries, which could start by 2010,” Slym said.
When asked about the company’s sales target for the current year, Slym said it would maintain last year’s growth (which was 10 per cent) despite GM India’s sales falling in the first five months of this year.
A healthy and financially viable GMI is good news for the Indian manufacturing industries. The new investments to be made for the engine and powertrain plants is welcome news.
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