General Motors is planning to bring into India a low-cost sedan currently being developed in China at SAIC-GM, GM’s 50:50 joint venture with Shanghai Automotive Industry Corp (SAIC), an Indian business newspaper reported.
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According to Financial Express‘ sources, the car, codenamed SG-308, will be priced between INR650,000 and INR700,000 (US$13,690-$14,740). The car is expected to reach Indian roads in the first half of 2012 and the development is seen as significant because this would be the first Indian-assembled car powered by Chinese technology.
Last January, Shanghai GM launched the Chevrolet New Sail sedan in China, claiming it was the first passenger car “created” in China by a Sino-foreign joint venture.
Though the car appears to have a strong South Korean GM-Daewoo heritage, it was developed by the GM-SAIC joint ventures Shanghai GM and the Pan Asia Technical Automotive Centre (PATAC). GM said at the time it would be sold in China and other emerging markets.
Sail itself is an established nameplate, originally launched in China by Buick, and similar to a sedan and wagon line developed from Opel’s early 90s Corsa by GM Brazil. That line was also sold in India. GM has since decreed Chevrolet as its low-priced, entry level car brand world-wide.
Shanghai GM will offer five variants of the New Sail priced from around CNY60,000 ($8,800).
“This marks a breakthrough in the under-RMB 70,000 ($10,300) small car segment, where Chinese brands have traditionally been dominant,” the automaker said in a launch statement.
Chinese buyers are offered 1.2- and 1.4-litre ‘S-TEC III’ petrol engines with variable geometry intake system that meet the local Phase IV emission standard and Euro IV (which now applies in India – ed ) and can be modified to meet China’s Phase V standard.
Five-speed manual transmission is standard and CD player and MP3 interface are available.
Dual front air bags, retractable steering column, antilock brakes with electronic brake-force distribution, child safety locks and a stronger child seat system are standard.
About 95% of components are supplied by GM’s global supply chain, with over 40% coming from industry-leading component groups or their joint ventures.
“SAIC has very advanced technology which GM will utilise. The sedan will be the first passenger car from the SAIC-GM portfolio,” the source told Financial Express today. The car would be developed in India but the technology would be sourced from China.
The source cited two factors behind the GM-SAIC move to tap the sedan market. “Firstly, the low-cost sedan segment in India is still largely untapped. Secondly, GM is clear that it does not want cannibalisation of its small cars, which is why it has steered clear of launching a hatchback for Indian roads,” he said.
The new GM car would compete with the likes of Tata Motors’ Indigo Manza (INR545,000-780,000), Indigo XL (INR600,000-800,000), Mahindra Logan (INR530,000-770,000) and the Maruti Suzuki Swift Dzire [sedan version of the popular hatchback] (INR520,000-780,000).
“In the US, GM is witnessing people opting for smaller cars; however, in India, the trend is the opposite. There is a substantial number of people who go for sedans due to aspirational reasons,” the source added. He said that the company would have to invest heavily in branding the car because Indians would be wary of Chinese technology.
A GM spokesman told Financial Express: “We are working on several product programmes from our stable and also with our partners including LCVs but nothing has been finalised yet. Even otherwise, for competitive reasons, we may not be able disclose product details at this juncture. Having said this, we will announce the details closer to the launch of the products from time to time.”
Mumbai-based SSKI Securities auto analyst S Ramnath said: “GM India has Chevrolet Optra (INR900,000-INR1.2m) and Cruze (INR1.22m-INR1.6m) but they want to tap the Aveo segment which has done well.” He added that having seen an overwhelming response for the Chevrolet Beat, the company would not want to launch another hatchback which would eat into its sales. According to Kapil Arora, auto analyst with Ernst & Young, Indian automakers want to be present in every price point and offer the best to their customers at as reasonable a price.
In December 2009, SAIC and GM announced a JV to sell passenger cars and light trucks in India roads. In May this year, GM India president and MD Karl Slym had said that the company would launch LCVs in India by the beginning of 2012, following which it would bring in passenger cars. The LCVs would be rolled out from its plant at Halol in Gujarat while passenger cars would be assembled at Talegaon.
Chinese help for GM India makes sense
