GM joins ‘nano’ bandwagon with $4000 car on anvil

Having emerged from bankruptcy after a US government bailout, General Motors Co is entering the emerging ultra-low-cost car market with plans for a compact for around $4,000, possibly produced in Asia and aimed at emerging markets.

Nick Reilly, the recently appointed executive vice president of international operations, said in Sao Paolo on Friday that GM saw a market for a car that costs around $4,000. He said the car would most likely be produced in Asia and sold in emerging markets. However, there was no specific indication that the car would be made or sold in India.

The ultra-small car segment is attracting increasing attention from manufacturers eager to keep up sales momentum in developing markets following the sharp slide in car sales in North America and Western Europe.

"When Tata Motors in India came out with their $2,500 Nano vehicle it put a lot of auto makers on the spot," Reilly admitted. Tata Motors has plans to ship the Nano to western markets.

But Reilly said, "We are not going to make cars that cheap because that is really a specific car for a very specific market that has different emissions standards and specifications than markets like the US and Brazil."

At a media briefing Friday in Brazil, GM's third-largest market by sales after China and the U.S, he added, "So we are looking at lower-cost vehicles, but do not know yet where it will be made or where will it be sold, though most likely in Asia."