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It has been twelve years since General Motors set foot in India and its only real success story is a badge-engineered exercise called the Chevrolet Tavera (a fifteen-year old utility vehicle design from Isuzu).
But GMI actually owes that success to the demise of the extremely popular and equally old Toyota Qualis. Its other cars -- the Optra sedan, SRV notchback, Aveo sedan and the Aveo U-VA hatchback -- all are just about managing to fill showroom space for GMI's starved dealers.
Now, these cars will have to make some room for the Chevrolet Spark -- an attractively priced small car loaded with features. Suddenly, there are Chevrolets for everyone, but will that translate into numbers?
"It was important to get into the small car market for GMI and now we have two very good entries in this segment," says Rajeev Chaba, president and managing director, GMI. "The Chevrolet Aveo is a spacious B-segment entry while we have a grown-up small car in the Spark."
Chaba adds: "We wanted to introduce the Spark in India two years back and would have done it if we had not waited for the Surajpur plant of Daewoo India. Mind you, we did not delay the introduction of other cars like the Optra and the Aveo -- but it would have made sense to produce the Spark from the Surajpur plant."
Isn't pricing the Spark between Rs 3 and 4 lakh (Rs 300,000-400,000) an anomaly, when GMI admits that it cannot produce more than 2,000 units a month even if it wants to?
Says Ashutosh Goyal, auto analyst, Edelweiss Securities, "GM has two very distinct products even if they are from the same compact car segment (Aveo U-VA and Spark). The company wants to give the consumer two diverse products. The U-VA starts at Rs 4 lakh (Rs 400,000) and the Spark is a lakh less than that, so there will be no overlapping of products. If Maruti is able to succeed with six brands in the same segment, then it can be possible for other players too."
The Spark roll-out plan (western and northern regions will get the car first) is based on the capacity constraints that GMI faces at its Halol facility in Gujarat. "We couldn't wait for our new plant in Maharashtra to come on-stream to enter the small car market, and going by the initial response to the product and our pricing, it looks like we are going to run three shifts at the plant this year," says Chaba.
The new Rs 1,300 crore (Rs 13 billion) facility near Pimpri in Pune will become a manufacturing hub for small GM cars and plans are already on the anvil to set up a captive engine and gearbox facility to supply the Maharashtra unit.
GMI is also gearing up to roll out Chevrolet passenger cars with frugal diesel engines. The diesel engine plans of GM-DAT (Daewoo Automotive Technologies) are ready now and the Indian arm should benefit from it soon, starting with the Optra sedan followed by the Aveo range.
The flurry of new car launches means GMI is aligning well with the global 'developing market' strategy of GM, which was almost non-existent a decade back when GM entered India and China. Product development for these developing markets meant adapting European small sedans and hatches. The Opel brand was painstakingly developed in India while China got similar cars with European underpinnings but wearing a very American brand name, Buick.
When GM acquired the beleaguered Daewoo of South Korea, it got some very capable car plants, a string of brand new cars that cost nothing for GM to develop, and the new developing market strategy was built around these platforms.
The Chevrolet brand was introduced in India while Opel was phased out. One by one, the erstwhile Daewoo platforms were rolled in. Today, GMI has a brand new car factory, an existing one that runs on three shifts to produce 65,000 cars, two new small cars, a successful utility vehicle. . . looks like GMI is getting serious about India. About time too.
