GM and SAIC considering an entry-level low-cost car

Article by Christian Andrei, on August 26, 2010

Another entry-level low-cost car could be entering the Indian market. China's Shanghai Automotive Industry Corporation Group (SAIC) and General Motors Company are considering a plan to explore and launch the A1 segment car that could be positioned below Spark and cost anywhere between US$ 3,500-4,000. GM has recently set up a US$100 million joint venture in Hong Kong to focus on the Asian markets. 

Industry sources claim that there are no immediate plans for GM India to produce an entry-level low cost car. However, if it does get launched, it will come out from its Talegaon unit and would be made available in several emerging markets.

Of course, the design inputs for the car will originate from India. It's also likely that the car will be positioned in other markets that include Latin America, Eastern Europe, Africa and China.

In talking about the joint venture that will be finalized within three months, P. Balendran, director & vice president (corporate affairs) of GM India, said that GM India will be taking SAIC's expertise in making cost-effective small cars and vans in order to develop products for the domestic market.

He also said that the first product to come out from this partnership would be one-ton passenger mini vans. Cars that are built at GM Indian facilities would also be exported. General Motors SAIC Investment Ltd (GMSIL) will be the name of the 50:50 joint venture formed by SAIC and GM.

It will be based in Hong Kong and it will exclusively cater to the Indian market and South East Asian countries. SAIC and GM have created a joint investment strategy that will be based on the automotive industry's long-term potential for growth in India. 

The duo will use GM's two vehicle-manufacturing facilities (at Talegaon near Pune and Halol near Baroda) and a powertrain facility in India, and GM's nationwide distribution network.

The first product that will be made by the two companies' collaborative effort is a one-ton light commercial vehicle (LCV). Other products that the partnership is looking to introduce at a later date are SAIC products including sports utility vehicles and cars.

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