GM to source $1 bn spares from India

General Motors Corp, the largest US automaker, plans to quadruple autoparts purchases from India to $1 billion in three years, buying more from low-cost sources to combat competition from global rivals.

Purchases would be about $250 million in value this year and increase fourfold by 2010, Rajeev Chaba, president and managing director, GM India, told reporters in New Delhi today.

GM India has as many as 100 suppliers, of which about 40 were being lined up for global sourcing, he

said.Detroit-based GM, battling a drop in marketshare at home, is turning to low-cost locations such as India and China to buy autoparts as raw material costs rise and competition intensifies with Toyota Motor and other rivals.

GM, which had losses of more than $12 billion in 2005 and 2006, aims to introduce new models in India to win a 10th of Asia's fourth-biggest automotive market by the end of the decade.

"India has got strengths in certain areas and we are trying to see whether in labour-intensive areas such as wire harnesses and forging, we can make the parts here,'' Chaba said after the press conference.

"We will source whatever and from wherever we get the best value for our money,'' he added.

GM, which has been selling cars in India since 1996, had 1.6 per cent of the passenger car market last year. It had 2.8 per cent of the overall vehicle market because of its best-selling Chevrolet Tavera sport-utility vehicle.