GM plans engine plant; Captiva launch in Jan

General Motors, the world's biggest automaker, plans to set up its first engine factory in India and introduce new models including SUV Chevrolet Captiva to boost sales.

GM expects to sell more than 60,000 vehicles in India this year compared with about 36,000 sold last year, Karl Slym, the managing director of the Indian unit, said in New Delhi today. The automaker plans to unveil the Chevrolet Captiva sport-utility vehicle in January for sale in the country, he said.

General Motors also said that it would meet its target of capturing 10% market share in the passenger car market by 2010.

Slym said that the company is also planning to set up its first engine factory in the country which will help the company reduce import costs and compete with Suzuki Motor Corp.

The proposed engine plant in India will be used for domestic and export markets, Slym said.

Detroit-based GM is turning to emerging markets such as China and India to extend its 76-year reign as the world's largest automaker. "It's good for us to have local parts and that includes power train capabilities as the government slaps a very high import duty on bringing engines into the country, Slym said.

General Motors now imports engines for all its models in India, except the Chevrolet Tavera multi-purpose vehicle.

Hindustan Motors makes the engine for that model.

In order to add capacity to the production of its Halol plat, GM is spending more than $300 million to build a second car factory in the country in Maharashtra. GM already has a factory in India that can make 85,000 vehicles annually.