GM to produce second small car, cheaper than Chevrolet Spark

Mumbai: The Tata Nano may well have focused the world's attention on a small car revolution in the country, with General Motors joining the bandwagon of major manufacturers looking to build small cars in India. Almost a year after it introduced its smallest model Spark under the Chevrolet badge, General Motors said on Monday that it plans to build another mini car in the country.

Nick Reilly, GM Group Vice President, and the company head in the Asia-Pacific region, said, ''We believe there is space for us to have another entry in the mini car segment in India'', adding that such a car will not be a competition to the Tata Nano but substantially cheaper than the Spark.

However, he freely admitted the radical change that the Nano has had on automobile manufacturers' strategic decisions. ''The Nano has definitely opened discussions in the automobile industry all over the world about the sales potential of such low-cost cars. Many companies, including ours, is looking what we can do with our own cars to lower cost from some of the existing categories that we currently have'', he said.

Marking a deviation from the usual company line of introducing GM products in India under the Chevrolet badge, the new vehicle may come under a different brand. He said that the new car would be built at the company's new facility at Talegaon in Maharashtra, and is expected to be on the roads in two years.

Reilly said that exports of the mini car from India might also be considered when the time comes.

Small cars constitute more than 75 per cent of all cars sold in India, somewhat supported by the government's favourable tax regime vis-à-vis bigger vehicles. Reilly feels that such a situation is going to exist in the near future, and this necessitates GM's presence in this segment, especially when the market leaders Maruti Suzuki and Tata Motors have so many offerings in this segment.

GM's earlier entrant in this segment, the Spark, which had been released with much fanfare by GM CEO Rick Wagoner in April last year, had contributed substantially to the company's sales volumes. The Spark forms almost 40 per cent of the GM factory's output in Halol, Vadodra in Gujarat. Other products in the company's portfolio include the U-VA, Aveo, SRV, Tavera, Optra and Captiva – all under the Chevrolet badge.

GM is quite enthusiastic about its growth prospects in India. Reilly feels that Asia-Pacific currently constitutes about seven per cent of the total market share of GM's global operations, and India, with its huge growth potential, will definitely help in increasing this share. He also spoke about a major capacity addition with the new Talegaon plant becoming ready for trial production from Wednesday this week.