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GM turns to China to crack tough Indian car market

by Reuters Posted on 05 Sep 20128,682 Views1 Comments

Production of Chevrolet Sail begins in China. It is the first model designed by GM's Chinese partner SAIC Motor Corp


Chevrolet Sail



General Motors Co began initial production of its first ever Chinese-designed car for the Indian market this week, a major step for the US automaker as it tries to scale up in a market where foreign companies have struggled.


India's love for the small car and its highly-competitive, price-sensitive market has confounded many of the world's major automakers, who wrestle with lacklustre market shares against small car focused brands selling India-specific models.


The compact Sail, sold as a sedan and hatchback, will go on sale next month as the first model designed by GM's Chinese partner SAIC Motor Corp, the president of GM India told reporters in an interview.

Also read: Chevrolet Sail coming your way in mid-2012


"What (SAIC) bring to us is more of a regional focus and more of an emerging market focus," GM India's Lowell Paddock said. "Sail is in some ways perhaps the first vehicle designed with primarily Asian customer requirements."


SAIC holds a 50 per cent stake in the Indian unit. A larger passenger van from SAIC's stable will begin production in India by the end of 2012.


Unlike in China, where GM and Volkswagen AG top the passenger vehicle market with a combined 30 per cent share, all foreign automakers combined – excluding Hyundai -- account for less than 25 per cent of the Indian market, despite billions of dollars in investment and decades of toil.


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