General Motors invests additional $500 million for expansion in India

General Motors, the world's leading carmaker, which has already invested about $1 billion in the Indian market, plans to put in an additional $500 million over the next seven years for upscaling its various car models and also increase production capacity of its manufacturing plants.

With the expansion of its manufacturing facilities, GM has also indicated plans to export cars from India in the future.

The American auto giant, which launched the Chevrolet Tavera Neo 2 on 2 September, also plans to launch another compact car in 2009 to increase its small cars range in India, which currently includes the Spark and the UVA from the Chevrolet stable. GM engineers at the Bangalore research and development centre have been working on the small car project, which would also be exported from India.

The company has already announced that it would launch the Chevy Volt - its first electric car, in the Indian market in 2009. Currently it manufactures Captiva, Optra, Aveo, SR-V, Aveo U-VA, Spark and Tavera in the Indian domestic market.

The company is considering making India a hub for the manufacturing of small cars, a senior executive stated during the inauguration of its second factory in India at Talegaon, near Pune. The US firm also wants to reach a market share of 10 per cent in India by 2010 from its current 4 per cent market share.

General Motors reported domestic sales of more than 6.000 vehicles in August, a 4.4-per cent rise from the same month last year.

GM inaugurated its second vehicle manufacturing facility at Talegaon with an investment of $300 million on 2 September. The plant will have an annual capacity of 1.4 lakh vehicles that could be expanded as per market requirements, the company said.
(Also see: GM considering India as small car hub)

With the Talegaon plant becoming operational, the company will increase production to 225,000 units per year from its current 85,000 units.Currently, GM manufactures its cars from its facility at Halol, Gujarat,  where capacity was expanded to 85,000 units from 60,000 units in 2007.