GM puts off small car plan

General Motors India (GM) has put off the launch of its small car in India, till 2007, after it dropped its plans to buy Daewoo Motor India's car plant at Surajpur in Uttar Pradesh. The company, however, has not ruled out the possibility of rolling out the small car from its existing plant at Halol in Gujarat.

Daewoo India's car plant was put up for sale, as it had failed to repay debts to financial institutions like Industrial Development Bank of India, ICICI Bank and Export and Import Bank of India, besides the customs department. GM had offered to buy the plant and had plans to manufacture small cars by using the production facility.

Addressing the media, Rajeev Chaba, president and managing director, General Motors India, said, "The plan regarding acquisition of the Daewoo plant has been dropped because of inordinate delays and the fact that it cannot cater to our long-term requirements. We, however, realise that the mini car segment in India needs to be penetrated."

We are, therefore, close to taking a decision on where it will be manufactured. We do not rule out rolling out the small car from our existing plant at Halol."

GM, which has brands like Chevrolet and Opel under its belt, plans to sell 33,000 cars this year in India as compared to 25,000 last year. In 2006, this number is expected to go up to 50,000 - and even above.

"By 2010, we intend to capture 10 per cent of the Indian market from the current 3 per cent," Chaba added.

In 2006, the company will be launching two versions of Aveo in India "" one in hatchback version and the other in notchback.

In 2007, it plans to launch the mini car and the diesel variant of Optra. GM has invested Rs 1,300 crore in India so far and plans to expand the facility at Halol to 85,000 units a year from the existing 60,000 units.