General Motors India plans to introduce light trucks developed in China by the end of 2011 for the transport of goods between emerging metros. The trucks which will be built and assembled in India, will compete in the 1 ton truck sector where Mahindra & Mahindra Ltd. and Tata Motors Ltd. already control a sizable share.
“Partnering with the Chinese is a very good strategy,” Puneet Gupta, an analyst at CSM Worldwide Inc told businessweek. “This is a segment where consumers are not very brand conscience if they can get a good product at a good price.”
GM India is excited to see how this unique sino-indian JV will work. One of the first of its kind, GM India is keen to see this market expand as distribution and infrastructure systems are put in place and India’s B and C cities grow. Further, to attract small farmers and traders that are value conscious, GM India is expected to price the light truck at US$4,000.
While eventually the light trucks will be manufactured at a plant in Halol, Gujarat, which has a capacity for 85,000 vehicles a year. for the present, the engines will be built and the light trucks assembled in Talegaon, Maharashtra, at a factory that makes models including the Chevrolet Beat and Tavera SUV.
The 1 ton truck market is expected to grow by 15 percent a year. GM India, which more than doubled April car sales from a year earlier, presently has no commercial vehicles on offer.
Last December, the board of directors of General Motor’s India was reshuffled to induct directors from Shanghai Automotive Industry Corporation (SAIC), as part of a 50:50 JV signed between GM and SAIC. Besides being represented on the board, the agreement allows SAIC to appoint a joint MD to co-manage Indian operations for General Motors India. 7-8 other senior management staff or “specialists” from SAIC have also been inducted into key departments of GM India. The agreement between the two parties was signed in order to aid GM’s entry and expansion into emerging markets, one of which is India.
GM already has a very strong tie up in China. SAIC-GM-Wuling Automobile Co is the China’s largest minivan maker which boosted sales 64 percent last year to 1.1 million vehicles. SGMW specializes in trucks and van sales in the poorer interior of the country.