GM ties up Rs 1,000 cr loan from PSU banks

General Motors India today said it has raised a Rs 1,000 crore loan from a consortium of Indian banks to part-fund a $250 million (nearly Rs 1,160 crore) investment for launching five vehicles from the stable of its Chinese partner, SAIC, by 2012.

"By the end of 2012 we plan to launch five vehicles from SAIC in India. Three of them will be light commercial vehicles (LCV) and two will be passenger vehicles," General Motors India President and Managing Director Karl Slym told PTI.

General Motors India, which was converted into a 50:50 joint venture between General Motors and Shanghai Automotive Industry Corporation (SAIC) last year, will launch an LCV first by the end of the next year and the other models will follow suit.

"Each model is expected to need an investment of $50 million. To meet this, we have tied up Rs 1,000 crore from a group of Indian banks," Slym said.

While IDBI is the lead bank, others are SBI, PNB, Canara Bank and Bank of India, all of which are state-run lenders.

Of the total, Rs 800 crore will be towards term loan for a period of seven years and Rs 200 crore will be to meet working capital requirements, he added.

Elaborating on the launch programme of the models from SAIC, Slym said: "The launch of all the five models should be completed by the end of 2012."
    
The vehicles would be launched under the GM Chevrolet badge, he added.
    
While the LCVs will be produced at the Halol facility of the company in Gujarat, the passenger vehicles will be manufactured at the Talegaon plant in Maharashtra.
    
"One of the two passenger vehicles will be in the Spark (small car) segment, while the other one will be in the Aveo (bigger compact) class," he said.
    
Slym said the models from SAIC to be launched in India are expected to have a localisation of 90 per cent, as the company will produce the engines from its Talegaon plant, which will start production of power trains from November.
    
On the distribution aspect, he said there would be a separate set up for the LCV division although GM will give the its existing dealers the first opportunity for selling LCVs if they are interested, he added.
    
In December 2009, US auto major General Motors had formed a 50:50 joint venture investment company --  General Motors SAIC Investment Ltd -- with SAIC, earmarking a total investment of about $650 million.
    
The Indian operations came under the JV and the six member board of GM India now has equal representations from GM and SAIC.