GM has big plans for India; investment in the country crosses $1 billion

The world's largest automaker General Motors (GM) may be losing big money in its home market, but it's quite bullish on its prospects in India. The company's investment in India is poised to cross $1 billion even as it is close to commissioning its second Greenfield plant in the country next month at Talegaon in Maharashtra with an outlay of $300 million. The company has also zeroed in on a $200-million power train and transmission system assembly line.

GM has invested $300 million in its Gujarat plant where the existing facility of 60,000 units had been increased to 85,000 units, Karl Slym, president and MD, informed the press yesterday. He said GM's market share has increased by 30 per cent during the current year while the company has initiated process of constructing more plants in Gujarat, Bangalore and Maharashtra and the production may go up by 3 lakh units in near future.

GM India's second plant is fast coming up at Talegaon, near Pune in Maharashtra in September 2008. It will have an initial annual production capacity of 140,000 vehicles.

Speaking on the new investment, he said, ''In couple of weeks, we expect to decide on the site for the new power train line that will serve the Indian operations and possibly support some of the manufacturing plants overseas.''

He said GM and the Indian Institute of Technology Kharagpur (IIT KGP) have announced plans to carry out joint research in the areas of electronics, controls and software (ECS). The partners also announced that a new educational curriculum would be jointly developed leading to a post-graduate degree in these fields.

He was speaking on the occasion of the launch of GM's third dealership in Hyderabad. He also confirmed the development of a small car from the GM stable amongst several other planned launches in the near future. GM Group Vice-President and the company head in the Asia-Pacific region Nick Reilly had already given such an indication back in March (See: GM to produce second small car, cheaper than Chevrolet Spar)

Asked if the financial troubles of GM back home will impact the company business in India, Slym said that it is unlikely as the BRIC countries are the biggest growth drivers, with China assembly lines crossing one million in sales. GM is also planning to set up used-car outlets starting with 10 and expects to take this up to 30. (See: General Motors announces massive $15.5 billion quarterly loss)

With a new plant on the way, capacity additions to the existing facility, a proposed used-car line and a whole new power train investment lined up, GM sure has big plans for India.