Mumbai: Auto maker General Motors Corp., or GM, will start production at a second plant in India in the first week of September, stepping up its capacity in the fast growing market in the face of growing competition and amid softer sales at home.
GM’s new plant in Talegaon in western Maharashtra will have an initial annual capacity of 140,000 units and make a new small car to take on rivals such as the Nano, an ultra low-cost car from Tata Motors Ltd priced at around Rs1 lakh, and scheduled for launch later in the year.
GM’s existing plant in western Gujarat is operating at an increased capacity of 85,000 units a year to make the Chevrolet Aveo and Chevrolet Spark hatchback, as well as the Chevrolet Tavera multi-utility and other models.
Model growth: A file photo of the Chevrolet Aveo at a Gurgaon mall. Photograph: Madhu Kapparath / Mint
“With the enhanced capacity, we would be able to satisfy the growing demand for our cars,” P. Balendran, vice-president of GM India, said in a statement, adding that greater operational efficiencies from the increased capacity would drive costs down.
GM, which sold 5,706 units in India in July, a 25% increase from a year ago, expects to have about 190 dealers across the country by year-end. GM has also said it may build an engine and power train facility.
Annual passenger vehicle sales in India are forecast to rise to more than two million units by 2010, with small cars accounting for more than two-thirds of sales. Growth in emerging markets, such as India and China, is crucial for the struggling auto maker, which is battling softer sales in the US market.