GM''s big bet on small cars

Mohini Bhatnagar
04 March 2005

GM is the world's largest auto company, and sells the second highest number of models globally after Toyota. But nearly all of them are mid-size and large vehicles. But in India, where sub-compacts and compacts rule the road, GM has been unable to capitalise on the booming Indian auto market, like Hyundai Motor, Maruti Udyog and Tata Motors have with their Santros, Altos and Indicas. Little wonder that the 96-year-old global leader controls only two per cent of the Indian car market, despite bringing in a range of vehicles during an eight-year presence.

This year, GM seems to have decided, that will change, courtesy Daewoo and Suzuki. Ever since it took over Korea's bankrupt Daewoo Motor to form the General Motors Daewoo Automotive Technology (GMDAT) in 2002, GM has been using the Korean company's portfolio of cars to launch small and entry level car models across the world under the Chevrolet brand. In India too, GM has been pushing Chevrolet as a value-for-money brand, while Opel has been placed in the premium bracket. GM's Chevrolet models Optra (formerly Daewoo's Nubira) and Tavera are cases in point.

Daewoo's 'B' class sub-compact Matiz was to be relaunched as the Chevrolet Spark in 2004 itself, but the plan came unstuck after the failure of GM's bid for Daewoo's Surajpur plant. The company has now shifted focus to the Aveo, showcased at the Berlin Auto Show in 2003 and launched in the US markets in early 2004.

But GM is still pursuing the Spark Project and is likely to expand the production capacity of its Halol plant in Gujarat by another 70,000 to 80,000 units a year to accommodate the proposed volume car. Following expansion, the plant's total capacity will be around 130,000 to 140,000 units per annum.

Aveo
Daewoo's Kalos (also sold as Lanos in some markets) has been re-christened as the Chevrolet Aveo, and is likely to be launched in India this year. The car is made in a four-door, three-box format as well, but in India GM is likely to launch the five-door hatchback version, to compete against 'C' class cars like Hyundai Getz, Ford Fusion and the soon-to-be-launched Suzuki Swift.

Expected to be priced in the competitive Rs450,000 top Rs600,000 range, the Aveo is styled by Giorgetto Giugiaro's ItalDesign studios, manufactured in Bupyong, South Korea, and is similar in size to the Hyundai Accent.

The standard equipment on the model includes a 103 horsepower 1.6 litre four-cylinder engine, five-speed manual transmission, 14 inch tires, power steering, a tilt wheel, tachometer, intermittent wipers and split folding rear seatbacks. The higher-end versions have air conditioning, a CD player with MP3 playback, power windows, power door locks and remote entry. Four-speed automatic transmission, anti-lock brakes and a premium audio system come as options.