New 800cc Spark to take on the Alto

Posted: January 30, 2011 in News & Updates
Tags: , , , , , , , ,

General Motors, in partnership with its Chinese partner Shanghai Automotive Industry Corporation (SAIC), is gearing up to take on the most successful car in India, the Alto. Expectations are that GM will come out with an all new 800cc engine strapped on to the Spark, thus making it cheaper and pit it directly against the Alto.

GM international operations president Tim Lee said the company was considering a variety of new products for the Indian market, which could include a rival to the Alto. “We are looking at every opportunity. While we are looking at every segment of the market, we understand that we do not have a product in the (Maruti) Alto range. The Alto is a credible product and we could be looking at that segment,” Lee told TOI.

The car would thus be priced under Spark, which is currently GM’s entry-level car model for India. With this aim at the Alto, GM joins other companies like Hyundai , Honda and Tata , all of whom are developing products aimed at the segment where Maruti’s blockbuster product operates. Lee said SAIC, one of the top state-owned Chinese automakers and GM’s JV partner for the emerging markets , would play a key role in the development of any low-cost car.

He said, “From an overall profitability stand point, developing a brand new car would be costly. Thus we would look at all products, from both SAIC and GM stable.”

GM, which has been in India for the last 14 years, has not been able to capture a sizeable chunk of the market and has a poor 4.6% market share. Lee, who was in Delhi to introduce the company’s first locally-produced engine series called “Smartech”, said GM had earlier not focused enough on the Indian market, though the situation has changed now.

“India is a key market for General Motors now. We do not intend to repeat past mistakes, but rather look forward to have an enhanced presence here.”

GM sold 110,804 vehicles in 2010 (up from 69,579 in 2009) and plans to introduce six new vehicles in the next two years. “Four of these will be passenger vehicles, while two will be light commercial vehicles,” Lee said.

SAIC and GM run a series of successful JVs in China and had in December 2009 formed an all-new 50:50 JV in Hong Kong to support expansion into emerging markets. The new JV had also got charge of GM India , that till then was a wholly-owned subsidiary of GM (US).

Lee said that SAIC would play a “major role” in the development and launch of new products in India, including light commercial vehicles and cars. “The frugal element (in design and production of car) is added by SAIC, while GM helps with its branding, distribution set-up and existing products.”

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