By: Nikhil Gulati
Source: http://online.wsj.com
The Indian unit of General Motors Co. said Friday it will invest half a billion dollars until the end of 2012 to expand production capacity for vehicles and engines as it attempts to meet growing demand for its Chevrolet brand of cars and also introduce a new range of vehicles next year.
Total capacity at the two factories of General Motors India Pvt. Ltd. will be doubled to 450,000 vehicles per year, said the company's president and managing director Karl Slym. The move will include expanding the capacity at its plant at Halol in the western state of Gujarat to 110,000 vehicles a year from 85,000 currently, he said.
An Indian laborer works in the assembly line at the GM India's manufacturing plant in Halol, near Ahmedabad, on Sept. 22, 2010.
Capacity at GM India's factory at Talegaon in the western Maharashtra state will be more than doubled to 340,000 vehicles a year from 140,000 vehicles now, Mr. Slym added.
"We will be raising capacity at Halol by the end of this year, but the total expansion will be completed by the end of next year," he said, adding that GM has invested more than $1 billion so far in its operations in India.
He said part of the investment will also go toward increasing the capacity for car engines at Talegaon to 300,000 units a year from 160,000 now.
Auto makers such as GM, Maruti Suzuki India Ltd. and Toyota Motor Corp. are either building new plants or expanding capacities at their existing factories to capitalize on growth in demand in the world's second-fastest-growing major economy. Sales of cars in India climbed 30% in the year ended March 31 to 1.98 million units--the biggest percentage gain in 11 years.
"We believe the India auto sector is poised to record a significant pickup in sales volume over the next three-five years, due to rising affordability, increased urbanization and improving auto-financing conditions," Ambrish Mishra and Navin Matta, Mumbai-based analysts at Daiwa Capital Markets, said in a recent note.
Sales of GM cars in India grew 59% last year to 110,804 vehicles. The 2010 sales figure is the highest since the company began operations here in 1996.
"Post-bankruptcy [of General Motors], we have been raising funds locally and funding expansion with internal accruals, and this time also we have tied up with a consortium of five Indian banks to raise loans," Mr. Slym said.
He said part of the funds for the expansion will also be contributed by GM U.S. as well as China's SAIC Motor Corp.
GM has an equally owned joint venture with SAIC in India, which plans to make cars from their Shanghai General Motors Corp. joint venture and mini commercial vehicles from their SAIC-GM Wuling Automobile Co. joint venture.
Mr. Slym said GM India will introduce a sport-utility vehicle from SAIC's portfolio by January 2012, which will be followed by a minivan and a light truck next year.
"More than half of the Halol capacity will be dedicated to the new range of vehicles we will launch from SAIC," Mr. Slym said.
GM India now makes and sells eight car models locally under its Chevrolet brand--the Spark, Beat and Aveo U-VA hatchbacks, the Optra, Cruze and Aveo sedans, the Captiva sport-utility vehicle and its multi-purpose vehicle Tavera.
Mr. Slym said a diesel-engine version of the Beat car will be introduced in July and the company will also unveil an electric mini car in June whose sales will commence at a later date.
"The diesel Beat should give us incremental numbers," he said. "As we have said, our target is to sell 300,000 vehicles in 2013 and 200,000 in 2012."
Source: http://online.wsj.com/article/SB10001424052748703655404576292303827419690.html
On sales this year, he said: "150,000 vehicles seems to be a fair number."
Source: http://online.wsj.com
The Indian unit of General Motors Co. said Friday it will invest half a billion dollars until the end of 2012 to expand production capacity for vehicles and engines as it attempts to meet growing demand for its Chevrolet brand of cars and also introduce a new range of vehicles next year.
Total capacity at the two factories of General Motors India Pvt. Ltd. will be doubled to 450,000 vehicles per year, said the company's president and managing director Karl Slym. The move will include expanding the capacity at its plant at Halol in the western state of Gujarat to 110,000 vehicles a year from 85,000 currently, he said.
An Indian laborer works in the assembly line at the GM India's manufacturing plant in Halol, near Ahmedabad, on Sept. 22, 2010.
Capacity at GM India's factory at Talegaon in the western Maharashtra state will be more than doubled to 340,000 vehicles a year from 140,000 vehicles now, Mr. Slym added.
"We will be raising capacity at Halol by the end of this year, but the total expansion will be completed by the end of next year," he said, adding that GM has invested more than $1 billion so far in its operations in India.
He said part of the investment will also go toward increasing the capacity for car engines at Talegaon to 300,000 units a year from 160,000 now.
Auto makers such as GM, Maruti Suzuki India Ltd. and Toyota Motor Corp. are either building new plants or expanding capacities at their existing factories to capitalize on growth in demand in the world's second-fastest-growing major economy. Sales of cars in India climbed 30% in the year ended March 31 to 1.98 million units--the biggest percentage gain in 11 years.
"We believe the India auto sector is poised to record a significant pickup in sales volume over the next three-five years, due to rising affordability, increased urbanization and improving auto-financing conditions," Ambrish Mishra and Navin Matta, Mumbai-based analysts at Daiwa Capital Markets, said in a recent note.
Sales of GM cars in India grew 59% last year to 110,804 vehicles. The 2010 sales figure is the highest since the company began operations here in 1996.
"Post-bankruptcy [of General Motors], we have been raising funds locally and funding expansion with internal accruals, and this time also we have tied up with a consortium of five Indian banks to raise loans," Mr. Slym said.
He said part of the funds for the expansion will also be contributed by GM U.S. as well as China's SAIC Motor Corp.
GM has an equally owned joint venture with SAIC in India, which plans to make cars from their Shanghai General Motors Corp. joint venture and mini commercial vehicles from their SAIC-GM Wuling Automobile Co. joint venture.
Mr. Slym said GM India will introduce a sport-utility vehicle from SAIC's portfolio by January 2012, which will be followed by a minivan and a light truck next year.
"More than half of the Halol capacity will be dedicated to the new range of vehicles we will launch from SAIC," Mr. Slym said.
GM India now makes and sells eight car models locally under its Chevrolet brand--the Spark, Beat and Aveo U-VA hatchbacks, the Optra, Cruze and Aveo sedans, the Captiva sport-utility vehicle and its multi-purpose vehicle Tavera.
Mr. Slym said a diesel-engine version of the Beat car will be introduced in July and the company will also unveil an electric mini car in June whose sales will commence at a later date.
"The diesel Beat should give us incremental numbers," he said. "As we have said, our target is to sell 300,000 vehicles in 2013 and 200,000 in 2012."
Source: http://online.wsj.com/article/SB10001424052748703655404576292303827419690.html
On sales this year, he said: "150,000 vehicles seems to be a fair number."
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