GM may set up powertrain unit

General Motors was considering setting up powertrain facilities in India, warranting a fresh investment of $300 million, Nick Reily, vice-president, General Motors, and president - Asia Pacific, said.

Reily was here to lay the foundation stone for setting up its $300 million (Rs 1,350 crore) manufacturing facility at Talegoan, Pune, today. General Motors India had signed a memorandum of understanding (MoU) to this effect with the Maharashtra government in August.

The Talegoan unit will be ready by April 2008. Initially, the unit will work in single shifts with a production capacity of 50,000 car per annum. In two years, it is expected to achieve the full production capacity of 1,40,000 vehicles per annum working in three shifts.

The facility will be used as a manufacturing base for small and mini cars, complimenting its Halol (Vadodra) division, which manufactures medium and large hatch backs along with multi utility vehicles (MUVs).

Over the next 3-4 months, the company also plans to augment the production capacity of the Halol facility from 65,000 to 85,000 units per annum at an additional cost of Rs 100 crore. With this, the total investment by the company in the region will touch Rs 1,500 crore.

"Together the two facilities will have a capacity of 2,20,000 vehicles per annum," said Reily adding, "Our total investment in the country with this plant will touch $750 million."

Following the setting up of its manufacturing unit, the company will work towards establishing a strong local supply network that could also be part of its global sourcing network.

"We are looking at an indigenisation level of 70-90 per cent in Talegoan," said Rajeev Chaba, president and managing director, GMI, adding the company had achieved 92 per cent localisation for its Tavera model and 50 per cent for the Chevrolet Optra.

It is in the process of increasing the indigenisation for the Aveo from 50 per cent to 53 per cent by next year.

"We would arrive at a decision for undertaking a powertrain project in the next six months," Reily said.

The Chevrolet Spark will be the first model to roll out from the Talegoan facility by August 2008, said Reily. He, however, refused to share the plans for the other models that will be manufactured here.

"For us, the small/ mini car segment was key in establishing a stronger presence in the emerging markets of Russia, China, South Africa, Latin America and East Europe," he said.

While in India, Reily will also be launching the Aveo sedan variant U-VA manufactured at its Halol manufacturing facility on Wednesday. A premium hatchback competing with the Maruti Swift and Hyundai Getz.

The Aveo U-Va will be available in the markets in 2007, said P Balendran, director and vice president - corporate affairs, GMI.