GM likely to hike car prices

With the price of steel rising in the global market, General Motors India may raise the price of its cars shortly.

The announcement comes weeks after Hyundai hiked prices. Maruti too has expressed its intention to hike prices.

"It is true that the rising steel prices have forced car makers to consider the price factor. We will certainly take a call on revising the car prices soon," Ankush Arora, vice-president (marketing), GM India, told reporters here on Wednesday.

However, he did not specify the percentage of the probable hike.

On the global slide in sales of GM cars, GM India Vice-President P Balendran said it would not have any impact on the Indian operations.

"In fact, we are growing at a healthy rate. Last year, we grew by 18 per cent in the passenger car segment. Our targetted growth rate for 2006 is 53 per cent. We intend to sell 50,000 cars this year. We sold 30,837 cars last year. It is our aim to capture 10 per cent of the market share," he added.

As part of the expansion plans, the GM India's plant in Gujarat will be upgraded to produce 85,000 cars by the end of the year.

"We have already announced investments of Rs 1,400 crore (Rs 14 billion) in the Indian operations. While Rs 200 crore (Rs 2 billion) will go towards developing new products, another Rs 100 crore (Rs 1 billion) will be invested in capacity expansion," Balendran explained.

On the forthcoming models, he said that the Aveo Yuva will be launched by the year-end to compete with Suzuki Swift and Hyundai Getz. "We are also working on a mini car for the Indian market and it might be rolled out in the first quarter of 2007," he stated.

Earlier, the GM India's latest offering Chevrolet SRV car was launched. Designed by Italdesign, the car was launched globally under different brand names last year.

Powered by a 1.6-litre petrol engine, the 4-cylinder sportsback car (1,598 cc) is aimed at the urban youth. The Chevy SRV (standard model) is priced at Rs 6.97 lakh (ex-showroom) in Bangalore.