GM plots Indian R&D drive

09 March 2011

NEW DELHI: General Motors, the auto giant, is focusing on innovation in India, in an effort to produce cars for both the local and global markets.

Speaking to the Business Standard, Karl Slym, president and managing director of General Motors India, reported that indigenous sales climbed 60% in 2010, surpassing 100,000 units as a result.

He predicted the sector would expand by between 12% and 15% in 2011, and GM hopes to grow faster than this rate, before topping 200,000 units in 2012 and 300,000 in 2013.

"Our target is to reach the 200,000 mark in 2012 and 300,000 in 2013. With the expansion of our capacity and introduction of new models and variants, we will achieve our target," said Slym.

"The company has invested $1bn so far and will invest $500m in India over the next two years."

During the coming two years, GM is launching six models and 14 extensions in India, with hatchbacks, sedans and SUVs among the slated offerings.

The American automaker has completed domestic R&D projects like creating Smartech engine technology, suitable for Indian roads and weather conditions, in cooperation with its new plant in Talegaon.

Having developed electric vehicles such as Chevrolet's Cruze and Volt for other markets, GM is working on a "mini" electric car appropriate for India.

Honda has stopped selling the hybrid Civic, which was simply beyond the price range of many Indian shoppers, and GM only intends to unveil its equivalent in April, rather than rolling it out straight away.

"This is a step towards introduction of electric vehicles," said Slym. "People will not buy an electric vehicle just because it is a green car. You have to see that it is not beyond the reach of customers."

"Showcasing the mini-electric car will help us asses the market. We want to use it as a knowledge-gathering process."

Such a strategy may be particularly effective given the Indian government's "national mission" to foster more eco-friendly transportation solutions.

Elsewhere, the American multinational plans to sell two light commercial vehicles designed in partnership with its Chinese ally, the Shanghai Automotive Industry Corporation.

"Last year, we conducted a survey to assess the potential for GM's premium cars like Pontiac, Buick and Cadillac in India, which proved that Cadillac has the strongest brand recognition," said Slym.

"We don't have any immediate plan of entering the segment; in the long run, we can consider it."

Looking ahead, the desire is to develop a brand in India that can be exported internationally.

"GM India is currently the fifth largest car maker in India and we will continue to grow faster. Our technical centre here has got immense potential," Slym said.

"Our dream is to come out with a product for the global market which will truly make us an Indian company."

Data sourced from Business Standard; additional content by Warc staff