labels: automotive, general motors india
GM''s new thrust news
Venkatachari Jagannathan
21 May 2004

Chennai: With the recent launch of its new car models and a few others in the pipeline General Motors India Pvt Ltd is on the road to breaking even and profitability this year. The company is targeting a turnover of Rs.1,800 crore during the year, up by Rs.1,000 crore from last year.

"We are in the process of launching new models and that will result in increased turnover and better bottom lines," says Anil Mehrotra, vice president, finance.

There has been a spate of new launches from GM India in recent times like Opel Corsa, Opel Vectra, Chevrolet Optra, Chevrolet Forester (a sports utility vehicle) and now the Chevrolet Tavera, the aggressively priced multiutility vehicle (MUV). The base level 10-seater Tavera is available for Rs5.64 lakh while the upper end 8-seater model is priced at Rs8.67 lakh and the 9-seater variant at Rs7.60 lakh (Chennai prices).

The company plans to be present in every market segment. GM will soon roll out the small car, Spark (the relaunched version of Daewoo's Matiz. As a matter of fact, the Optra is also from Daewoo's Nubira portfolio. This apart the company is also conducting a due diligence on Daewoo Motors India Limited and, as per plans, Spark will be rolled out from the company's Surajpur facility near Delhi.

Adds Mehrotra, "Our hopes on the quantum jump in the turnover is based on good reasoning. Last year, Optra was available for just six months whereas we will see the model's sales for the full year. Similarly, Tavera is available for the remaining period of this fiscal apart from other models."

During the first quarter of this calendar year the company saw Optra's sales surge past the 4,000-unit mark capturing around 31 per cent market share.

GM India has invested around Rs500 crore for expanding its production capacity from 33, 000 units (the company is geared to sell 30,000 units this year to 55,000 units per annum, (working on double shift). Much of that investment has gone into the production of Tavera on which GM India is banking. Built on the Isuzu Panther platform, Tavera has been reengineered for Indian market.

"We built 70 prototypes and tested the model driving over 600,000km before finally launching the vehicle," adds Mehrotra. In order to keep the price points attractive, the company has localised nearly 85 per cent of the components and plans to increase it to 93 per cent in a year. The critical part - the engine and gear box - has been sourced from Hindustan Motors Limited.

According to Amit Dutta, vice president, marketing, sales and after sales service, says that the segment grew 47 per cent in 2003 over 2002. "The target for 2004 is 94,000 units. In the first three months, sales of multiutility vehicles (MUV) touched around 33, 000 units. On the other hand, the passenger car segment grew by 19 per cent in 2003."

He predicts the MUV segment is poised to grow by more than 20 per cent for the next four years because of changing tastes and new products driving the market. "We also see car buyers shifting their preference from sedans to MUV," he adds.

Facilitating that is the range of 48 accessories that enable the buyers to personalise their Tavera.

However, much of the MUV growth may, perhaps, be attributed to the boom in the call centre sector whose employees are picked up by vehicles like the Qualis. The Tavera with its trendy looks and fuel economy is expected to give a good fight to the breadbox model, Qualis Fleet, which is cheaper at Rs5.37 lakh.

The Tavera's turbo diesel Isuzu engine comes with an attractive warranty tag of five years or 1.5 lakh km whichever is earlier from the date of sale. In addition, the vehicle comes with two-year warranty cover.

In the drive up to the launch, GM India has upgraded and expanded its dealer network. Most facilities are adopting the state of the art 3S integrated facility norms. The company plans to have its presence in 120 Indian cities/towns.

GM seems to be following is following a strategy of value-for-money in the Indian market, similar to Maruti Udyog's and Hyundai Motors' though the same cannot be said of Ford India Pvt Ltd.

also see : GM and Ford set to carry the war into India
General Motors launches Tavera

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GM''s new thrust