General Motors sees more sales in non-metros, towns

February 24th, 2009 - 8:40 pm ICT by IANS  

Bangalore, Feb 24 (IANS) The Indian subsidiary of US auto major General Motors (GM) has seen a dramatic shift in the purchase of its vehicles in the Indian sub-continent, with non-metros and towns accounting for 60 percent of its total sales in 2008, a company official said Tuesday.
“Non-metros like Ahmedabad, Jaipur, Pune and Lucknow have accounted for over 60 percent of our sales in the last calendar year (2008) and we see the trend continuing, as the metro market is seeing contraction due to slowdown and negative sentiment,” GM India vice-president P. Balendran told reporters here.

The auto major is hoping to grow 10 percent this year with a slew of new models and versions scheduled to roll out from its manufacturing plants at Halol in Gujarat and Talegaon in Maharashtra despite an anticipated flat growth in the industry.

“We plan to launch three new models this year and special additions of existing models with greater localisation. The market is expected to gather momentum in the second half of this year as we expect interest rates to climb down by then,” GM India managing director Karly Slym said at the launch of Chevrolet Captiva Automatic sports utility vehicle (SUV) and the special edition of its compact car Spark in Karnataka.

With metro markets saturated, the company is betting on sustaining its growth rate of 10 percent from other state capitals, tier-two cities and towns in light of a good agriculture growth and the central government’s economic stimulus packages, including excise and tax incentives.

“The fiscal and monetary measures of the government will have a positive effect on the market. We see interest rates moderating further in the next three months and demand for cars picking up,” Slym said.

Though GM India’s combined installed capacity is about 225,000 units per annum, it utilised only one-fourth of the capacity to minimise inventory, as it was able to sell only 65,702 vehicles last year and 60,032 in 2007.

Geographically, about 35 percent of the company’s sales come from north India, 30 percent from west, 20 percent from south and 15 percent from the east.

To increase its share of indigenisation, GM is also setting up an engine and gearbox plant at Talegaon with an installed capacity of 160,000 units per annum in petrol and diesel versions at an investment of $200 million (Rs.9.90 billion/Rs.990 crore). “It will be up and running from 2010,” Slym said.

The Captiva SUV is priced at Rs.2.47 million, while Spark Muzic is Rs.327,000 on road in Bangalore.

The company markets about seven models under the Chevrolet brand across the segments spanning sedans, compact cars, multi-utility and sports utility vehicles.

GM has invested $1 billion in its India operations over the last 12 years.

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