Home / Companies / GM ends alliance with Reva, says no impact on India growth plans

New Delhi: Aday after Mahindra and Mahindra Ltd said it was taking a controlling stake in Bangalore-based Reva Electric Car Co., General Motors India (GM) scrapped its partnership with the company being acquired, saying it would make use of its own alternative fuel and propulsion technologies.

“We plan to look within the General Motors portfolio for alternate technology vehicles," said Karl Slym, president and managing director of GM India.

Its US parent company is working on launching the Volt, a car that runs on batteries and has a small combustion engine that charges the cells as the car runs, giving it a range of 480km. The car is scheduled to be launched in the fourth quarter of this calendar year. The Reva, which operates solely on batteries, has a range of 80km.

Slym declined to elaborate on whether the company would consider bringing the Volt to India. “We’re studying the market for such a car," he said.

Under the agreement signed in September between GM India and Reva, the companies had agreed to use Reva’s technology to power the Spark small car, sales of which were to begin by the end of the year.

That arrangement had already suffered a setback as both GM India and Reva realized it would take them longer than originally anticipated to make sure the technology was free of glitches.

In March, they announced that the cars would be made available by the end of the year only for internal testing purposes. A final date for a commercial launch wasn’t set. The 15 car tests being carried out will be scrapped.

“There will be no eSpark," Slym said, adding that the company was yet to decide on whether it would deploy alternate technology on the Spark or the Beat models.

The scrapping of the alliance is unlikely to hinder GM India’s short-term growth prospects in the Indian market.

“This shouldn’t impact the company in India as electric car sales in large numbers are still a decade away. They can soon find another way," said Deepesh Rathore, an analyst at IHS Global Insight.

The company is on track to launch light commercial vehicles as well as cars brought from its Chinese partner SAIC Corp. by the end of 2011. The cars will be sold in India under the Chevrolet badge.

The three light truck models in the one-tonne range will be manufactured at its plant at Halol in Gujarat. It declined to disclose details on the cars to be launched.

GM India is a 50-50 partnership between US-based General Motors Corp. and Shanghai-based SAIC Corp.

“We see a big opportunity in exporting light trucks from India as GM doesn’t have this in its portfolio globally," said Slym. South America is one of the destinations the company plans to ship to, he said.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
Get alerts on WhatsApp
My ReadsRedeem a Gift CardLogout