As the labourers' strike at General Motors India (GM) Halol plant crosses a month, the company is all set to start making the light commercial vehicles (LCVs) at the plant that will roll out in 2012. In an e-mailed interview with Sohini Das, GM India president and managing director Karl Slym tells Business Standard that the strike at Halol is a temporary aberration and would not have any impact on their production plans. Meanwhile, the company is coming up with a diesel variant of its popular compact car Beat in June from its Talegaon plant as well as firming up plans to showcase an electric vehicle in a couple of months. Edited excerpts:
You are all set to come up with the light commercial vehicles from the GM-SAIC stable.What percentage of net sales in 2012 and 2013 can come from these LCVs ?
We intend to introduce the first commercial vehicle (CV) from the joint venture stable by the end of this year or the first quarter of next year. Our plan is to operate in the sub 1-ton category to start with and aim to address the customer needs better by superior products keeping market requirements. In terms of global scenario, India's CV segment is growing at a faster pace than any other markets in the world. We expect the CV market to clock at least 1.28 million this year if the present growth momentum is sustained. The LCV segment is growing at 25 per cent annually with sales of over 2, 80, 000 units and new entrants are targeting the segment. Coming to our sales volume, we should be able to consolidate our position in the CV segment as well, going forward with the rights products. Having said this, it is too early to set any sales target at this stage.
Will the Halol impasse delay the launch of the LCVs? How much investment has already gone in to make the plant ready for making the LCVs ?
It is a temporary aberration and will not have any bearing on our expansion or launch plans. It should be in the range of around $250 millions.
What is your take on the stand-off at Halol?
Our Halol plant is an outstanding workplace for hundreds of employees. It has an impressive history of employee safety and has won many safety and other awards, including several in 2010. We respect and follow the law and comply with all rules pertaining to health, safety, working conditions and employment. We support the lawful and constructive resolution of any concerns, as we operate our plants with a strong focus on employee safety. We will continue to cooperate with all authorities and work closely with our employees and their union bargaining representatives to find a resolution. We want to ensure that GM India remains an outstanding workplace and that we are able to fully meet the expectations of our valued customers.
GM is planning to showcase a mini electric car soon. When do you plan to start making the car for sale in India, and at which plant?
We are pursuing our electric vehicle programme and will be show-casing an electric vehicle (EV) car in the next couple of months. Going forward, we will look at the option of introducing the EV to this market depending upon the availability of the required infrastructure and readiness of the market.
How do you see the demand for electric cars shaping up in India in the coming years?
With growing awareness about green technology, environment-friendly mobility solutions like electric or alternate fuel vehicles have bright future. Government has also announced that it will come out with policies for hybrids, electric vehicles and other environment-friendly mobility solutions. In the recent past, government has announced setting up of two committees entitled National Board for Electric Mobility (NBEM) & National Council for Electric Mobility (NCEM) to frame policies for promotion of hybrid and electric vehicles in the country. The policy should be out by 2012.
With the new diesel Beat coming up, what percentage of GM's sales in 2011-12 can come from the diesel variants? What is the demand like in the market for compact diesel cars?
We have the diesel versions of Optra, Cruze & Captiva, all of which are doing very good in their respective segments. However, its too early to comment on future sales figures of these variants as the market in general has started slowing down because of hike in interest rates, hike in fuel prices, hike in commodity prices etc eetc. Having said this, dieselisation is fast catching up. Presently the diesel market is around 28% and we expect this to growth to 35 to 40 per cent in the coming years. If the present diesel trend continues, we should be able to generate some good volumes.
You have said earlier that GM could also offer diesel engines on the shelf for companies who might be interested. Are talks on/in final stages with any of the domestic players?
Our first priority is to consolidate our position in the Indian market. We will look at other options only after meeting our requirements and business plans.
The company plans to triple its sales over the next two years and is all set to launch six new variants.What will be the growth driving segments for you in India?
Our product pipeline is very robust and we plan to bring in at least six new vehicles and 14 fuel varieties in the next two years. In the LCV category, our plan is to operate in the sub 1-tonne category to start with and aim to address the customer needs better by superior products keeping market requirements. The volume players will continue to be Beat, Spark & Tavera. We have already started consolidating our market position in the passenger car segment and we are now the 5th largest car manufacturer in India. Our long term goal is to emerge as a volume player in any segments we operate and consolidate our position in the market place.