General Motors may drive in Nano rival with Chinese help

Source :31 May 2010, 0326 hrs IST,Nandini Sen Gupta,ET Bureau




SHANGHAI: General Motors may use its Chinese associations to launch a rival for Tata Nano in India, a top company executive told ET.

“We will look at every market segment and I wouldn’t rule out anything,” said Timothy E Lee, president, GM International Operations, when asked about competing in India’s new entry-level segment.

The US carmaker believes its joint venture with Shanghai Automotive Industry Corporation (SAIC), one of the top three automakers in China, will help it introduce a car to compete with the world’s cheapest car at Rs 1 lakh.

GM’s small cars already in India such as Chevrolet Beat, Spark and Aveo are designed in South Korea, at erstwhile Daewoo Motors.

“When you harvest from your partnerships the collective wisdom of other cultures, it’s incredible what you can do,” Mr Lee said.

This marks a u-turn in the US carmaker’s earlier stand when its global officials indicated that they did not think the Nano segment was viable for the company.

But now GM bets on its China connection to break new grounds. SAIC has already acquired 50% stake in GM India.

The first products from General Motors’ three-way joint venture in China with Wuling and SAIC will be introduced in India end 2011 when it will roll out two minivans — Wuling Rongguang and Sunshine. These will be built at GM India’s Talegaon and Halol plants.

“The portfolio of GM, SAIC and SGMW will be looked at for India,” said Mr Lee.

GM India now has access to the complete portfolio of GM, SAIC as well as the SAIC-GM-Wuling Automobile Company combine to be introduced in the country, said Mr Lee.


This will include several cost-effective products in both passenger and commercial vehicle space from the SAIC-Wuling alliance.

Meanwhile, the Chinese carmakers are happy coming to India with a GM tag.

“We are going to position ourselves as a GM partner in India to create opportunities for everyone,” said Zhu Xiang Jun, executive director at SAIC Motor Corporation.

“These models are not Chinese models but GM’s global models which will be taken to India to create jobs and opportunities,” added Mr Jun.

While GM gives them access to a name that ruled the global automobile market till recently and an established network in India, an equally compelling reason might be India’s sensitivity to Chinese companies.

New Delhi recently told Indian telcos not to place orders with Chinese equipment makers Huawei Technologies and ZTE Corp due to security concerns.

GM officials, however, say that there has been no indication that Indian authorities have a problem with SAIC buying 50% stake in GM India.

“This sector has automatic approval and its not sensitive like telecom,” said P Balendran, spokesman of GM India. “We have had a detailed discussion with Indian officials and they don’t have a problem,” he added.

He said that the architecture for the Wuling products will come from China but they will be made in Halol and Talegaon.

Apart from the Wuling minivans, GM’s Chinese alliance could spawn other products for India including the recently launched Chevy Sail, touted as its first car totally developed at Shanghai GM.

GM officials say the Chinese alliance will help GM India emerge as a volume player in this market quickly.