General Motors to make low-cost cars

March 17th, 2008 - 7:37 pm ICT by admin  

New Delhi, March 17 (IANS) General Motors (GM), which offers products under the Chevrolet brand in India, will manufacture cheaper cars in the next few years without compromising on its standard, said a top official here Monday. “We are looking at low-cost cars,” said Nick Reilly, vice-President of GM Group. The company would definitely not go for leasing technical specifications of Tata’s Nano - the cheapest car in the world. The Chevrolet brand car has a cheapest model - Spark - sold at $7,000 (Rs.280,000), he said.

The car will not compete directly with Tata Motors’ Nano, but will be cheaper than GM’s current lowest priced car in India. GM’s Bangalore research and development division is expected to play a significant role on the design of the small car.

GM is also moving ahead with a huge investment towards increasing fuel efficiency of its cars.

The company is in the process of setting-up its second manufacturing plant at Talegaon in Maharashtra. It has only one manufacturing plant in Gujarat at present. The Talegaon plant would be operational in August. The trial production will start this week, said GM officials.

GM has invested more than $300 million (Rs.7.5 million) in the Talegaon facility, which will have an initial capacity of 140,000 units. Once the construction of the new facility is completed, the company expects to churn out at least 225,000 units while its present capacity is about 85,000 only.

Interestingly, the company sold 60,032 cars, last year, which was a record 68 percent increase in sales compared to year 2006. “We expect to propel our sales this year to 90,000 units,” said Reilly.

GM is also willing to offer compressed natural gas (CNG) mode of fuel facility for its high-end cars. As of now, it has CNG fitted in few of its models. GM officials also stated that they were not making much profits.

“But in the next 3-4 years we expect good returns,” said P. Balendran, vice-president, GM India.

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