GM focuses on alternative markets

Mohini Bhatnagar
14 November 2008

General Motors Corp, once the biggest car company in the world, is now in dire straits in its home country and may have to file for bankruptcy unless the US government bails it out.

In fact, October has turned to be a nightmare month for most auto companies in the US and most of them are putting off releasing sales figures for the month.
According to analysts, car sales in the US, plunged 32 per cent in October 2008, to 1991 levels. In addition there was an overall sales decrease of 10 per cent for the first 10 months of the year.

In the same period, car sales fell between 7 and 8 per cent in Germany and France, and 13 per cent in Japan. GM and other automakers have since then shut down many plants in North America and are shifting focus to other countries which have been less affected by the slowdown.

General Motors for one is continuing unfazed with its plans in India and Russia. In India, in the past one year, the company has committed $ 200 million in investment in a new plant in Maharashtra and its latest plans include launching a mini car that would compete against the Nano and a plethora of mini cars that will hit the Indian market by 2010. These include ultra small cars from Toyota Motor, Bajaj Auto, Renault Nissan among others.

General Motors plans to roll out its mini car in India in 2009 from its Talegaon plant, near Pune. This will be followed by the launch of premium car Cruz sedan by 2010.

P Balendran, GM India vice president corporate communications insists that, ''The company is neither reducing production, nor going for a lay off. In fact, we are adding our head count. The second production unit in Talegaon enabled us to meet the increase in demand for the entry car segment. At present, the plant is working in single shift and produces around 200 cars per day. He adds that by 2009 the company is planning to add a second shift. This apart the company is also planning to upgrade its other existing models in the market.
 
The company's facility in Talegaon is GM's second vehicle plant in the country. It has an annual capacity of 1,60,000 units, expandable to 3,00,000 units.
 
General Motors India vice-president (marketing, sales and after-sales) Ankush Arora said, "Our India plans remain intact and investments will continue as announced earlier. The company's marketing investments will be as per plan," he said.