GM plans small car to take on alto

General Motors is looking at introducing an entry-level car to be positioned below the Chevrolet Spark, to drive up volumes in the Indian market. The vehicle, likely to be launched in collaboration with Shanghai-based SAIC Motor Corp (SAIC), will be pitted against Maruti Suzuki’s Alto, the largest selling small car globally in 2010. Over 300,000 units of the Alto were sold worldwide last year.

Tim Lee, president, international operations, GM, said, “We are looking at having products strategically across segments to boost sales in the Indian market. We working closely with SAIC and looking at opportunities to introduce a product priced lower than the Spark in future.”

The Chevrolet Spark is priced between Rs 3.23 lakh and Rs 4.24 lakh (ex-showroom), while the Alto is tagged between Rs 2.31 lakh and Rs 3.27 lakh.

General Motors has the Chevrolet Spark and Chevrolet Beat, both small cars, and a premium hatchback, Aveo U-VA, in its portfolio. Together, they registered sales of 75,814 units in 2010. Maruti Suzuki sells around 32,000 units of the Alto each month.

“India and the rest of the emerging markets are very important to us. The business model after the IPO (Initial Public Offering, of GM shares) is to focus on and leverage on these growth markets,” added Lee. The small car segment, nearly 70 per cent of passenger vehicle sales in India, grew by a third between April and December 2010. Its potential has attracted many companies, such as Japan’s Toyota and Honda Motor, to develop products exclusively for the market here.

While Toyota Liva, the hatchback the company designed on the Etios platform, is to be introduced here in June, the Honda Brio will follow later this year.

With the car market in india registering growth of over 30 per cent this financial year, GM has also firmed plans to gain a bigger share of the pie. The company intends to treble sales to 300,000 units in India by 2013 and has planned to launch six new vehicles in association with SAIC over the next two years. This would include two light commercial vehicles, a sports utlity vehicle, a sedan, a hatchback and a notchback.

The company launched a powertrain engine today, developed exclusively for the Indian market at its technical centre in Bangalore, and to be manufactured at its factory in Talegaon, Pune. The 1.2-litre engine would be first fitted on the Chevrolet Beat from February 1, and then to other models. The locally developed engine would help optimise costs and enable the company to price products competitively.