The nexus between General Motors and Shanghai Auto of China on 50:50 basis is to concentrate more on the Asia-Pacific markets starting from India. GM India is identified for a subsidiary with two plants, Halol in Gujarat and Talegaon in Pune would seize to be disturbed from this JV. It is to remembered that Halol has the production capacity of 85000 units while the latter has 140000 units. In addition Chevy brand platform(GM-Reva’s electric version of Spark) is to share the technical support.
According to the president of GM India, there will be a shuffle in the Indian ownership operations , currently hold by GM Corp affiliates in Australia and Korea-under the banner of GM-DAT, would become the partners of the new venture. However, the president of international operations of the company said that the SAIC and GM would like to have an equally shared and owned investment with the Hong Kong base. With GM to shell out the Indian assets(worth $300-$350 million), SAIC is likely to contribute $300 million to $350million additionally for expansion to take the tally to $650 million.
Under the new JV the investment to made by each will be $50 million for the Hong Kong operations. SAIC is basically a Chinese government body and the JV intends to unveil the first product of LCV by 2011, but some analysts foresee the rolling of vans from Wuling. The vans would be 800 cc and is likely to be a tough competitor to Tata’s one tonner Ace and if it comes as a cargo carrier then the competition will be directed towards Maruti Versa /Omni cargo.
In China these vans are provided in petrol version but possibilities are there for diesel versions if the Indian market is initiated. SAIC is keen on introducing low priced cars and utility vehicles into Indian roads solely from its identity. In all, SAIC is planning for a wider range of vehicles, export possibilities and sourcing for funds. There will be LCV, passenger cars and utility cars in that order. GM, for its part, is contemplating on engineering margins and pan-Asian market potential out of this deal, feels the industry.