General Motors on Friday confirmed it would invest $300m on a ‘green field’ manufacturing site in India where, according to the Financial Times (FT), the world’s largest carmaker has struggled for more than a decade to build a presence in one of the fastest-growing car markets.
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(As reported by Reuters on Thursday before official confirmation from the auto maker), GM hopes annually to manufacture 100,000 units of the Chevrolet Spark small vehicle at the new plant in Maharashtra, west India, with production starting in the last quarter of 2008, the FT said.
This would complement GM’s current modest presence in India, where it already assembles models including the Optra and Tavera models at a plant in the neighbouring state of Gujarat. Capacity in Gujarat will also rise from 60,000 to 85,000 units by early 2007, the FT noted.
The Financial Times added that GM’s investment, inked in a preliminary agreement with the government of Maharashtra on Thursday night, is the second green field car project announced for the state in a week. Tata Motors, the second largest domestic maker, unveiled a joint technology and manufacturing venture with Fiat to make 100,000 vehicles across both brands and 200,000 engines and transmission boxes a year, at a plant in Maharashtra.
The FT noted that India’s car market is growing 25 per cent each year as Indians take out more loans in a country where the world’s leading manufacturers now all have a presence. But GM’s market share is just 2.5%, despite a focus on the low volume premium-car segment.
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By GlobalDataThe Spark would take it into the fiercest slice of the market, the small economy car, where Maruti, controlled by Suzuki, reigns along with Hyundai and Tata, the report added.
