GM-Shanghai Auto aiming for small cars

Chinese Shanghai Automotive Industry Corporation (SAIC) in association with General Motors India is likely to enter both the passenger and commercial vehicle segment by next year. General Motors is thinking of developing small engines and transmissions with China's SAIC Motor Corp. The Indian car market is dominated by smaller cars, which amount to about 70 per cent of the total sales. According to media reports, GM and SAIC would produce fuel-efficient engines between 1 to 1.5 litres for China and other parts of the world.

This kind of market situation calls for more attention on the smaller segment. And for this GM and SAIC have a 50:50 joint venture. According to a source quoted in the press, “The bigger play, though, could be small cars which account for a lion's share of India's automobile sales and this is where the small engines alliance will play a key role.”

With this kind of a set up, GM would be able to come up with a model to put against the much hyped people’s car Tata Nano falling in the Rs 2 lakh category. However, there are lots of speculations and what the end result would be is a thing to be seen until any official revelation.

GM’s current portfolio includes Chevrolet Spark, Chevrolet Beat, Chevrolet Cruze, Chevrolet Yuva, Chevrolet Aveo etc. Hatchbacks like Chevrolet Spark and Beat fall under the Rs 3 – 4 lakh price range. The company still has the option of getting a model in the entry level category placed beside the likes of Tata Nano or Maruti Alto.

GM’s current arch rivals are carmakers Maruti Suzuki, Hyundai and Tata. Cars like Maruti Alto, Tata Nano, Hyundai Santro, Hyundai i10 etc are some of the well established cars in various segments that GM is up against. The entry level segment is especially a very attractive one as that is where the bulk of demand lies and it is currently ruled by carmaker Maruti Suzuki.