UPDATE 1-General Motors builds second plant in India http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-08-03T170603Z_01_BOM186338_RTRIDST_0_AUTOS-INDIA-GM-UPDATE-1-PICTURE.XML&rpc=66&type=qcna
Thu Aug 3, 2006
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MUMBAI, Aug 3 (Reuters) - General Motors Corp. (GM.N: Quote, Profile, Research) is building a second plant in India as it steps up the pace of investment to grab 10 percent of the country's fast-expanding passenger vehicle market by 2010, the U.S. carmaker said.
GM will invest more than $300 million in the factory, which will be located in Talegaon in the western state of Maharashtra and have an initial annual capacity of 140,000 units, senior company officials told reporters on Thursday.
Industry sources had earlier estimated a capacity of more than 100,000 units and an investment of more than $400 million.
The plant, which will begin production in the third quarter of 2008, will initially make the Chevrolet Spark for India. Other models may be added, and capacity can be expanded as the market grows, said Rajeev Chaba, managing director of GM India.
"GM is serious about being a serious contender in India's automotive market," Chaba said.
"Small cars make up the largest segment in India, and we don't expect that to change," he added.
GM, which is also increasing capacity at its plant in Halol in the western Gujarat state to 85,000 units from 60,000, plans to launch the Spark in India in the first half of 2007.
GM had said it would either retool its Halol plant or set up a new plant to make the small car after it gave up a bid for Daewoo's car unit in India last year.
GM has invested about 14 billion rupees ($300 million) in India so far. It makes the Chevrolet Aveo sedan, the Chevrolet Tavera multi-utility vehicle, the Optra sedan, the Corsa and Corsa Sail in India.
It expects to sell 45,000 to 50,000 units in 2006.
"Our sales have grown significantly in the last three years, but we are still a relatively small player in India," said Nick Reilly, president of GM Asia-Pacific.
"We cannot remain a global leader without a strong presence in high-growth vehicle markets like India," he said. GM may export cars made in the Talegaon plant and will consider launching its luxury cars at a later date, Reilly said.
India's passenger vehicle market is forecast to nearly double to 2 million units by 2010. The market for small cars, more than two-thirds of the overall market, is now dominated by Suzuki Motor's (7269.T: Quote, NEWS, Research) Indian arm, Maruti Udyog Ltd. (MRTI.BO: Quote, Profile, Research), and South Korea's Hyundai Motor Co. (005380.KS: Quote, Profile, Research). India's third-biggest car maker, Tata Motors Ltd. (TAMO.BO: Quote, Profile, Research), last month said it would build cars, engines and transmissions in a joint venture with Italy's Fiat (FIA.MI: Quote, Profile, Research).
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