GM India to raise competition with a new small car

The recent decision taken by the Indian unit of General Motors of manufacturing small engines and transmission boxes in partnership with China based SAIC Motor Corp is believed to be having tremendous implications for India. What can even deepen the trouble for Indian automakers is the recent news of GM India's opting for its IPO. The fear is that GM India's long standing Chinese ally could acquire a significant stake in this process. 

An industry source quoted as saying in a leading news daily in India that the bigger play, though, could be small cars which account for a lion's share of India's automobile sales and this is where the small engines alliance will play a key role. It is to be mentioned here that GM-SAIC joint venture is a 50:50 partnership between both of the company's. The joint venture company has already announced that it will be launching a light-weight commercial truck from  GM India's plant in Halol, Gujarat.

Moreover, the GM-SAIC partnership is also planning to launch a China bound fuel efficient engines ranging from 1 to 1.5 liters. After the manufacturing in China, the engines could be used in this JV's prospective low cost car in the Indian market. The car is expected to be priced at Rs 2 lakh and will be competing with the likes of Tata Nano and Hyundai's upcoming 800 CC car in this price segment. The JV is aiming to roll-out three cars and two light trucks in India by year 2012. 

The GM India's current product portfolio includes a range of cars across the segments including small hatches Chevrolet Spark andBeat, entry level sedans like Chevrolet Aveo, premium sedan Chevrolet Cruze, SUV's like Chevrolet Tavera and luxury SUV likeChevrolet Captiva.