GM move on Daewoo unit soon

The US-based General Motors expects to take a decision on taking over the car assembly assets of beleaguered Daewoo Motors India, soon. This would enable the automaker to enter the domestic small car market, which comprises over 77 per cent of all passenger cars sold in the country.

The Daewoo factory, located near Delhi, has the capacity to produce 120,000 cars annually, D Nick Reilly, president and CEO, GM Daewoo Auto and Technology Co, GM's South Korean arm, told reporters here.

"We are interested in the old Daewoo facilities in India. A due diligence is on to see whether it is viable. There are some issues to resolve. We hope to complete the due-diligence in 1-3 months," Reilly said at the launch of a new multi-utility-vehicle, Chevrolet Tavera, by GM India.

Tavera pricing: To be sold from mid-June, the Tavera will be available in six variants priced between Rs 544,012 to Rs 844,984 (ex-showroom Delhi). The 2500cc vehicle is pitched against the Toyota Qualis and Mahindra Scorpio in the utility vehicle segment. This segment grew 28 per cent in 2003-04 to 144,981 units.

The Indian facility of Daewoo Motor Co was put on sale in 2002 by the financial institutions following the company's inability to clear dues of over Rs 1,000 crore.

This was due to a drastic drop in sales after the bankruptcy of the parent company in November 2000. GM is likely to use DMIL's car assembly unit to produce the compact car Matiz, which is now sold as Chevrolet Spark in other markets.

"We need to have a presence in the small car market if we have to be a significant player in India. If not Daewoo, we have other products to introduce and we will do it," Reilly said.

Aditya Vij, GM India president and MD, said the company expects to sell 10,000 Taveras in 2004. "We are putting up a new paint shop at our plant. This will increase the capacity to 50,000 units. In 2005, our target will be to sell 30,000 Tavera vehicles," he said.

Designed and engineered by Isuzu, GM's Japanese partner, the Tavera will have an initial local content of 85 per cent as the engine would be produced locally by Hindustan Motors.

Isuzu R&D move: Japanese auto maker and General Motors alliance partner Isuzu Motors has announced its intentions of roping in General Motors India's R&D centre in Bangalore to work on some of its future product launches.

Randall Schwarz, executive vice president of Isuzu Motor said "Isuzu Motors is keen on using GM's tech centre in Bangalore to leverage its own R&D activities and work on new products."