New Delhi: General Motors India Ltd, maker of the Chevrolet brand of vehicles, plans to launch its second compact car by late 2009 and expects to make 85,000 units in the first year, according to component makers who have helped design parts of the vehicle.
Mint had first reported on 18 April that GM plans to introduce two models in the Indian market, including a small car, to boost its market share in the dominant segment of the country’s nearly 1.4 million-unit passenger vehicle market.
Out of every 10 passenger cars sold in India, seven are compact cars and companies such as Maruti Udyog Ltd and Hyundai Motor India Ltd have built their dominant market share by selling small cars. This has prompted global firms, such as Nissan Motor Co. and Ford Motor Co., to invest Rs30,000 crore in building factories and developing small cars, which are very popular in a nation where only seven in every 1,000 people own a car.
A GM spokesperson declined to comment on the second car saying: “We are concentrating on the Spark right now.” GM, which entered the market in the mid-1990s, last month introduced the Chevrolet Spark model, a compact car to boost its market share to a targeted 10% by 2010 from the 2.2% now. It is also spending Rs1,400 crore to build a factory in Talegaon, on the outskirts of Pune in Maharashtra, to ship out 1.4 lakh small cars in addition to its Halol unit, which will make 85,000 units a year starting 2008.
A 10-year-high industrial growth that is creating more jobs, is stoking demand for cars in India, although rising lending rates and inflation at a two-year high are raising concerns that growth may slow down. Still, car sales in India are expected to grow at 10% annually to cross 22 lakh units in 2010, according to the Society of Indian Automobile Manufacturers.
The new car, code named M300, is being developed by GM’s Korean arm, GM Daewoo, which is the centre for designing all its small cars. “These cars are based on the concept cars unveiled recently by the company,” said one vendor who didn’t wish to be named.
In the New York Auto Show held last month, GM Daewoo had showcased three minicar concepts: the Trax, Beat and Groove.