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General meltdown?

General meltdown?
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First Published: Tue, Apr 14 2009. 08 48 PM IST

Updated: Tue, Apr 14 2009. 08 48 PM IST
A structured bankruptcy could well be the only future for America’s biggest and once brightest symbol of manufacturing prowess. But what does that really mean for you and me?
Most of us associate the word bankruptcy with going kaput or belly up, as it were. But in General Motors’, or GM’s, case, it’s likely to be a good thing. The proposed plan sees GM being split into two entities: a separation of the poorly selling brands, debts, legacy costs, old plants and surplus dealerships from the modern plants, younger brands and more future-friendly models.
This will mean the new GM that emerges from bankruptcy will be leaner and meaner, with profitable cars that attract consumers who want efficient, compact vehicles. And it will be a company that can take on Toyota much better. So how does that help us in India? Well, the bits that get to stay include brands such as Chevrolet, the Korean operation (which supports most models in India today), and most of the subsidiary businesses in emerging markets.
As an independent entity, General Motors India has actually been doing pretty well of late. Including the recent infusion from its parent last year, GM’s total investment in India is close to Rs5,000 crore. This includes a newly added plant in Talegaon, Pune, and a new engine plant that will start production in a few months and will make the Indian operation virtually self-sufficient.
A brand new life: Chevy’s Beat is the Spark’s new avatar.
But what about new and relevant products from GM India? It recently introduced the all-wheel drive (AWD) version of its popular Captiva SUV, and I got an opportunity to clock considerable miles on one. I had liked the Captiva when it first came out last year, because it had a growly, powerful, common rail diesel engine, drove well, and looked great. But what stuck out like a sore thumb was the lack of a four-wheel drive or automatic transmission—and that seemed to give the petrol-gulping Honda CR-V the upper hand. But now the new Captiva LTZ variant has both. The auto gearbox is just a 5-speed, though, and the gear ratios have been fixed such that the engine maintains higher revs. So the LTZ sounds a bit too noisy. The gear changes are smooth, but in city traffic the lower gears seem a tad sluggish. The AWD is effective, and handling is definitely improved. It also has features such as hill-descent control which add to the appeal. It has third-row seating (albeit not too comfortable), which gives it a space edge on the CR-V. The price is Rs18 lakh and Rs20 lakh for the front-wheel and all-wheel drive, respectively.
Besides the new Captiva LTZ, Chevrolet’s got an action-packed year lined up—welcome in a dull market. There is the all-new Spark, which I told you about in my Geneva report last month, that will debut here as the Beat by the end of the year in the Hyundai i10’s price bracket (Rs4-5 lakh). Before that, we will get the Cruze sedan that will be positioned above the Optra, at about Rs12 lakh, to take on the popular Honda Civic. The Cruze will have the same 2-litre diesel engine that services the Captiva/Optra Magnum and will most likely include an automatic variant.
Should you then part with your hard-earned money on a gamble called General Motors? Well, the decision is yours, and no, I am neither backing GM nor offering you a guarantee. But with so much going for it, it would take a huge strategic mistake for the Indian business to go off track, or be affected by the impending bankruptcy, if that happens. And those of you who already own a Chevy or even an Opel, breathe easier.
Siddharth Vinayak Patankar is editor, auto, NDTV. Write to us at roadrunner@livemint.com
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First Published: Tue, Apr 14 2009. 08 48 PM IST