GM to invest $1 bn in India, launch 10 all-new vehicle models

29 Jul 2015

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General Motors on Wednesday said it would invest $1 billion in its Indian operations over the next few years to turn it into a new global auto manufacturing and export hub that will serve the fast-growing emerging markets, top executives said on Wednesday.

The investment is part of GM's plan to invest $5 billion to strengthen its business in global growth markets through the development of an all-new vehicle family that will meet the rapidly changing demands of customers in these markets.

GM, which has expanded its successful partnership with Shanghai Automotive Industry Corp (SAIC), the state-owned Chinese automaker, through an agreement to jointly develop the vehicle family core architecture and engine, hopes to significantly reduce vehicle costs to make a big push in the emerging and developing markets through localisation of production.

The programme that will result in significant development cost savings and optimised total vehicle cost represents another important step in GM's previously stated architecture consolidation plan.

GM said it is also planning to launch 10 new domestically manufactured vehicles in India over the next five years in a push to double its market share in the country by 2020, Stefan Jacoby, GM's chief of international operations, told a news conference in New Delhi.

GM sold 56,700 vehicles in India in 2014 and had a market share of 1.8 per cent.

GM chief executive Mary Barra said at a briefing in New Delhi that the investment in India was expected to create 12,000 jobs at the company and its suppliers in India.

"GM cannot remain a global leader without making a serious investment towards expanding our presence in growth markets like India," Barra said at a briefing in New Delhi.

With much of the anticipated growth in the automotive industry in 2015 to 2030 expected to come from emerging and developing markets, General Motors is taking steps to capitalise on that growth, according to GM president Dan Ammann.

''Strengthening Chevrolet's position through this major investment is consistent with our global strategy to ensure long-term profitable growth in the markets where we operate.''

By creating one all-new vehicle family to replace several existing vehicles, Chevrolet expects to substantially improve competitiveness and profitability by delivering what customers expect in each market while taking maximum advantage of the benefits of global scale.

''This new vehicle family will feature advanced customer-facing technologies focused on connectivity, safety and fuel efficiency delivered at a compelling value,'' said Mark Reuss, GM executive vice president, Global Product Development, Purchasing and Supply Chain. ''It will be a combination of content and value not offered previously by any automaker in these markets that are poised for growth.''

The vehicle family is being developed by a multinational team of engineers and designers assigned to ensure each entry is tailored to meet the expectations of customers in each market. Vehicles will be manufactured and sold in several markets including Brazil, China, India and Mexico, and exported for sale to other important growth markets.

But GM said, ''There are no plans to export the vehicles to mature markets such as the United States.''

A high level of localisation of parts suppliers should drive significant savings over the life of the programme, GM said, adding that the programme is expected to result in the production of more than 2 million vehicles annually with the first entry planned for the 2019 model year.

India's automobile market has been sluggish for the past few years, with annual sales of less than 3 million cars. But, by 2020, analysts expect India to become the world's third-largest passenger vehicle market after China and the United States.

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