The Hindu Business Line : GM's new unit to have annual capacity of 1.4 lakh units

Small car
The proposed small car is to be introduced in mid-2007
The company is expected to expand its annual manufacturing capacity from 60,000 to 85,000 units

Mumbai , Aug. 4

General Motors has decided to invest Rs 1,350 crore in a new manufacturing facility at Talegaon, Maharashtra. The facility spanning over 300 acres will have an annual production capacity of 1,40,000 units. The land, owned by MIDC (Maharashtra Industrial Development Corporation), has been given on a 95-year lease contract to GM India.

New car

The plant will manufacture the upcoming Chevrolet Spark (the small car) that will be launched in the third quarter of 2007. Over 1,000 jobs are being generated due to the new development. Mr Rajeev Chaba, Managing Director, General Motors India, said that an additional of 20 jobs per one job sourced at the facility will be added at various levels in the ancillary and retail industry. The company shall start building the plant from August-end and take 20 months (3rd quarter - 2008) to build the facility.

Manufacturing capacity

The small car will be introduced in mid-2007. Initially, the car will be manufactured at GM India's Halol (Gujarat) manufacturing facility. In order to meet demands for new product line, the company will expand its annual manufacturing capacity from 60,000 units to 85,000 units. By the end of 2008, the company will have a total manufacturing facility (Halol + Talegaon) of 2,20,000 units on an annual basis. Mr Nick Reilly, Asia Pacific President, GM Group said, "We hope and expect our market share to grow likewise to our production capacity". The Indian subsidiary has sales targets of 45,000 units and 75,000 for the current year and 2007 respectively.

New markets

The new facility will in future cater to exports of other GM markets and therefore, the products developed at the facility will be world-class. As an indicator of change in market trends, Mr Reilly stated that last year GM sold more cars outside US than in the local US market. The world's largest automobile company is therefore now looking at prospective markets such as China, Korea, Russia, Poland and India.

For the State, the announcement was an achievement after a series of discussion and amidst severe competition from 20 other States that the company had visited before narrowing down to Maharashtra. Addressing a press conference, Mr Vilasrao Deshmukh, Chief Minister, Maharashtra said, "Critics claimed that Maharashtra is loosing its no1 position for foreign direct investment in the country; this announcement is a befitting reply to them."