Shanghai: US automaker General Motors Corp., or GM, and Chinese partner SAIC Motor Corp. are considering making mini-vehicles together in India because of demand for low-cost automobiles, according to two people familiar with the discussions.
The firms may draw on Wuling mini-vehicle technology, said the people, who did not want to be identified. SAIC-GM-Wuling Automotive Co., China’s largest mini-van maker, is owned by GM, SAIC and Liuzhou Wuling Motors Co.
The potential in India is great and small cars are popular there and it will be good investment for both companies for the long term, said Liu Lixi, a Shanghai-based analyst of Northeast Securities Co Ltd.
Ford Motor Co., the only major US automaker to stay out of bankruptcy, said it will start producing a small car in India next year to be sold in the country and exported. Rising disposable incomes in India may more than double car sales to three million annually by 2015. Tata Motors Ltd, the Mumbai-based automaker, plans to increase production of the Nano.
SAIC spokeswoman Zhu Xiangjun declined to comment.
Global automakers have turned to emerging markets, such as China and India, for growth while sales in their home markets have slumped. Passenger car sales in India rose 26% in August, while they surged 90% in China.
China government’s stimulus measures have helped double sales at Shanghai General Motors Co. Ltd, GM’s passenger car venture with SAIC Motor, to 63,303 in August. Sales of Wuling minivans more than doubled to 88,711 during the month.