GM may launch Chevy Spark early next year

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GM Daewoo Auto & Technology, GM's South Korean arm, is working on a new version of the small car, which will be rolled out locally by December this year as Matiz III. The same car will be exported to India. It is currently undergoing trials in GMDAT's facilities in South Korea.

This will be Matiz's second innings in India. After Daewoo Motor India Ltd, which had launched it first, went into a financial tailspin, the production of the small car stopped in 2002. It is worth noting that GM India has offered to buy out the assembly plant of DMIL located at Surajpur near Delhi. DMIL's creditors have agreed to the offer and GM India has begun its due diligence on the plant, the officials said indicating the exercise may get over by August this year.

Once the deal is through, GM India will use the facility to assemble the Matiz. It would also give the company a better access to the North Indian market.

In another initiative, GMDAT has decided to launch all its products in India under the Chevrolet brand. Other geographies where GMDAT brads will carry the Chevrolet logo include USA, Canada, the Caribbeans, all Latin American markets and some markets in Asia Pacific.

The other brands under which the company will sell its cars globally include GM Daewoo, Buick, Suzuki and Pontiac. GM India had earlier launched GMDAT Lacetti as Chevrolet Optra in India, which the company claims has become a leader in its market segment. Next month GM India is also going to launch Isuzu Panther, a multi-utility vehicle, under the Chevrolet Tevara brand.

The officials said that it would take on Toyota Qualis and Mahindra & Mahindra's Scorpio. GM India also has cars under the Opel brand running on Indian roads. However, GM India functionaries added that there were no plans to phase out the Opel brand in the country in favour of Chevrolet. "The two will co-exist," the functionaries added.

When asked if GMDAT would like to make India its global hub for small cars, senior GMDAT executives said India had all it takes to become the center for small car production.

The officials, however, added that GMDAT had no such plans on the drawing board at the moment.

At present, the Matiz is being produced only in South Korea, though it is exported to several countries including under the Chevrolet Spark brand.

Lines up Korean Splash

GM Daewoo Auto & Technology (GMDAT), owned 70 per cent by General Motors and its associates, has lined up new launches to regain market share in the South Korean passenger cars market.

While the company is developing a sports utility vehicle in house, it has also drawn up plans to launch the Holden Statesman, a luxury car, from the GM stables in Australia.

According to GMDAT president & CEO Nick Reilly, the South Korean market has undergone a raid change in the recent past, with the government coming out with tax breaks in favor of SUVs and luxury cars.

At present, GMDAT's portfolio comprises mini car Matiz II, small car Kalos, the premium compact Lacetti (sold as Chevrolet Optra in India), multi-purpose vehicle Rezzo and the medium-sized Magnus. With this portfolio, GMDAT is present in only 38 per cent of the South Korean market. "With these new launches, we hope to be present in a larger section of the market," Reilly told a group of visiting Indian journalists.

The SUV is likely to be launched some time in 2006 and will take on Hyundai's hugely popular Santa Fe. Hyundai is the largest player in the South Korean car market with a share of 47.7 per cent, followed by Kia Motors (an associate of Hyundai) with a 23.7 per cent share and GMDAT with a 9.7 per cent share.

In addition, GMDAT is also developing a new diesel engine for its vehicles. The company hopes to begin commercial production of 200,000-250,000 diesel engines per annum at its Gunsan plant by early-2006. Work is also going on to develop a new 6-speed automatic transmission for small cars.

GMDAT is also likely to increase sourcing of components from low-cost producers in countries like China, India and Thailand under GM's worldwide purchasing system. According to Reilly, the company plans to pare production costs by two per cent per annum by increasing outsourcing. "However, the (South) Korean ancilliary units too are getting more competitive. Last year, these companies have sold components worth $600 million to GM operations worldwide," he said.

GMDAT came into being in October 2002 when GM took over the car manufacturing assets of Daewoo, after the Korean chaebol had sunk neck deep in a financial mess. According to Reilly, the company is yet to break even, though it has seen an improvement in market share in the last year and a half.

(The correspondent's visit to South Korea was sponsored by GM India)