More Domestication in GM products
The Indian wing of Detroit-based General Motors has come out with its proposal to have enhanced domestic components- probably 90% , from the current 60%- for the production of commercial and passenger vehicles. This move may come into practice some two years from now so that the progressing local vendors would reap much benefits, said the MD and President for India. He added that only those components which may be unavailable in India would be imported. Pertaining to the local component deals, the vendors have done business worth $500 million during the Q1from GM of this year. Corresponding business deals in Europe and North America is slightly lesser than this and the MD is hopeful of wresting $1 billion before this year end.
GM has got associated with the Chinese company SAIC and is coming out with new models in MUV and SUV segments. The move towards more localization is mainly on reducing the overall cost including input and assembling. The strategy is to effect more reduction on the cost of the vehicles, especially the sensational Beat [images], in the compact car platform. This may not come handy since the market is already on the hands of Ashok Leyland and Tata Motors. Moreover, the global company Volvo is stepping into the Indian market very aggressively. This does not seem to discourage GM because it has already devised strategies to meet all sort of hiccups. The company’s power train plant is equipped to shell out 3 lakh petrol and diesel engines. The company’s investment for this purpose is $200 million. Come November this year, the compact car Beat will have both petrol and diesel versions.