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Wednesday, Nov 22, 2006

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GM lays foundation stone for Talegaon plant

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To manufacture mini car Chevrolet Spark

Talegaon facility is expected to go into production in the first quarter of 2008.
GM is also focusing globally on increasing its presence in the mini-car segment in other emerging markets.
Power train facility for its vehicles on the cards.

AUTO FACILITY: The Maharashtra Chief Minister, Mr Vilasrao Deshmukh; and the Maharashtra Industries Minister, Mr Ashok Chavan; with the President & Managing Director, General Motors India, Mr Rajeev Chaba (right); and the GM group Vice-President and President, Asia Pacific, Mr Nick Reilly at the proposed site of GM's new plant at Talegaon in Pune on Tuesday. - Shashi Ashiwal

Pune , Nov. 21

General Motors Corporation on Tuesday laid the foundation stone for its second plant in the country at Talegaon near Pune to manufacture mini car Chevrolet Spark and said the plant would also manufacture several other cars in the segment from its global portfolio of small cars.

The company is also looking at the possibility of establishing a power train facility for its vehicles for which it is looking at several options, the GM group Vice-President and President, Asia Pacific, Mr Nick Reilly, told reporters here indicating that investments for the facility would be in the range of $300-400 million.

Establishing presence

Giving a clear indication of the country's growing importance in the group's global game plan, Mr Reilly said, "The facility at Talegaon represents a key component of GM's global strategy of establishing a strong presence in high-growth emerging markets around the world. We believe that to remain a global industry leader tomorrow just as we are today we must be a leader in places like Russia, South Africa, China and of course India.

With the exception of China, where GM has built a major presence in a few years, we don't expect any single market anywhere in the world to grow faster over the coming decade than India. That is why we have invested about $750 million in this country," he said.

The $300-million Talegaon facility is expected to go into production in the first quarter of 2008 and will manufacture 1,40,000 minis beginning mid-2002, and will more than double the company's capacity in India to 2,20,000 .

"We are serious about being a strong competitor in the Indian automobile market and want to get at least a 10 per cent share by 2010," Mr Reilly said. "The Chevrolet mini-car and other products we build in Talegaon will be among our latest products offered anywhere in the world," he added.

Mini-car segment

The group, meanwhile, is also focusing globally on increasing its presence in the mini-car segment in other emerging markets, according to Mr Reilly, who said that market shares in Asia are currently at 7 per cent without participating in the Japanese market where it has only offerings such as the Cadillac and Saab.

"We intend to grow our offerings in the Japanese market slowly," Mr Reilly said, adding that the mini-car segment is a rapidly-growing market in places like East Europe, Latin America and Africa.

Meanwhile, General Motors India is in the process of a Rs 100-crore expansion project to take up capacities from the current 65,000 units annually to 85,000 units, according to its President and Managing Director, Mr Rajeev Chaba. "We have been hampered in growth due to the absence of a mini car in our portfolio and with the Spark we can compete for increased market shares," Mr Chaba said.

Power train facility

"Even at very conservative estimates, 70 per cent of the market for cars in India is in this segment and it represents a million cars," he pointed out. "The mini-car segment in India can be broken up into at least three sub-segments beginning with entry segment, and our priority will be to focus on all of these once the Spark rolls out," he said, adding that it will roll out in the under 1.2 litre category. GM India hopes to sell 50,000 cars in 2006, he added.

Meanwhile, the company's power train facility plans seems to be picking up speed with a decision likely to be made on the project within six months, said Mr Reilly. "We would like to be developing power trains for our vehicles in petrol and diesel, and are looking for a local source for the same," he said, adding that the company has several options in mind for locating the facility.

Mr Reilly also said that the Pune region and India could prove to be a strategic location for sourcing components for the group's Asia Pacific requirements. The group already sources approximately $1 billion components from Korea and China, where it has manufacturing facilities, he pointed out, saying that India also has a similar strength in its large component manufacturing community.

Related Stories:
Work on GM's Talegaon plant to begin on Nov 21
GM likely to set up new plant in Maharashtra

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