GM may take Spark off Maruti, Hyundai

The world's biggest car-maker, General Motors, today made its entry in the small-car segment with the launch of Chevrolet Spark in four models. It is likely to impact segment leader Maruti Suzuki and Hyundai Motors.

For the base model, Spark will be priced at Rs 3.09 lakh (ex-showroom Delhi), while the most expensive model would be Rs 3.89 lakh.

Spark will also come with a three-year or 100,000 kilometre service warranty, one of the best in the industry.

Bookings will commence from April 18, while deliveries will start from May 1. The top-line model also comes with additions such as ABS brakes and alloy wheels for an extra Rs 35,000.

For consumers, the launch of Spark has opened up the choices in the small-car market as it is aggressively priced compared with Maruti's Wagon R (Rs 3.33 lakh) and Zen Estilo (Rs 3.26 lakh) on one hand and Hyundai Santro (Rs 3.24 lakh) and Fiat Palio (Rs 3.49 lakh) on the other.

Says a former CEO of a car company: "I think 70 per cent to 80 per cent of its volumes will come from Santro buyers-the Zing is already four-year old, and the new model will come in a few months. Spark was launched globally last year, so it has an advantage".

The company, which has thus far sold two million units of the small car globally, will roll out Spark from its Halol manufacturing facility(with a capacity of 80,000 cars annually) in Gujarat.

Initially 2,000-3,000 units of Spark will be rolled out a month till the new manufacturing facility at Talegaon(1.4 lakh cars annually) near Pune comes up, GM India officials said at the launch.

GM executives admit that they will have a capacity constraint this year till the new plant rolls out next year.

General Motors Chairman and CEO Rick Wagoner said the company expected India (apart from China)to emerge as the second-fastest growing automobile market globally in the next decade.

"It till be important for GM to do well in emerging markets such as India for its future growth," Wagoner said.

Global car sales this year are estimated to be about 70 million units, he said, adding 70 per cent of the growth would be coming from the Asia Pacific region, he said.

Currently, GM India's share in the domestic car market is 2.8 per cent but the company has set eyes of achieving 10 per cent market share by 2010.

"We believe that Chevrolet Spark will significantly contribute towards achieving our vision of capturing 10 per cent market share," Wagoner said.

General Motors also plans to increase sourcing from India over the next 4-5 years to $1 billion annually. "We have been increasing localisation content and with volumes expected to rise, we expect to raise sourcing from India to a level of one billion dollars," Nick Reilly, president of GM Asia Pacific, said.

Reilly said in an interview that Spark will begin with a localisation of 45 per cent to 50 per cent and go up quickly to 60 per cent to 70 per cent, which might be the key for it to make money in India.