Firstpost

By Pranbihanga Borpuzari

There is a change of guard at General Motors India. As Lowell C Paddock takes over as president and managing director of the India operation, he spelt out his views on the Indian market, his plans for the country and what to expect from Chevrolet in the coming years in an exclusive interview on the sidelines of the Delhi Auto Expo to Pranbihanga Borpuzari of Entrepreneur magazine, a print publication of the Network18 Group. Excerpts from the interview:

What are your views on the Indian market?

If you look at the market from a products perspective, it is maturing like many other emerging economies. As markets mature, customer demands mature and diversify, which may include SUVs (sports utility vehicles), MPVs (multi-purpose vehicles) or luxury cars. It is no longer purely a mini market.

In this auto expo we have seen a lot of launches in the SUV and MPV category. While India is traditionally a very fuel-economy conscious market, why are fuel-guzzlers being launched at such a rate?

I think this is a question which goes to consumer taste and this is not unique to India. The same has been the case in China and North America, where customers make tradeoffs. Fuel efficiency has been traded off for attributes that they like in an SUV or MPV. Whether it is interior flexibility, the ability to go off road or just the high seating position, customers make those tradeoffs and we as manufacturers make our product as efficient and competitive to meet such demands.

Customers are maturing very rapidly in emerging markets. They are well connected globally, well informed, earnings have gone up and they want to enjoy the type of products customers in every other market enjoy. I think no one wants to be viewed as an emerging economy.

You already have the Tavera and have now unveiled the MPV concept which will make its way to the market by the end of the year. What would your key markets be? Is it primarily urban or would you increasingly look at rural India?

If you look at our history we have been able to cater to both the markets. The Tavera is a real workhorse in the Tier II and III markets. What was important for us was to maintain our presence with the Tavera but also be able to expand in the bigger metros by having Bharat IV norm products. Now we are able to (cater to) both kinds of markets and going forward we would like continue to have a product portfolio which appeals to our customers, both rural and urban. The new MPV that we will launch fits in both these markets. If you look at China, where the vehicle is running today, it appeals to both sets of customers.

The Chevy brand is already well established in India. What would your priorities be?

I want to perpetuate the momentum on the Chevrolet brand, which is globally one of the fastest growing brands. I think we have been able to find a message which resonates with people in terms of design, efficiency, family. The positioning of Chevrolet as a reliable partner is something which I want to perpetuate. My predecessor Karl has focused on establishing the brand, but I am reminded that brands only work when supported by good products. I would like to continue bringing good products and a start has been made with the launch of the Sail hatchback and the MPV Concept.

What would your sales target be over 2012?

It is very hard to predict and over some time it has been in everyone’s mind. To make a call at this time is very difficult. We have the budget coming up, issues going on with the economy in Western Europe, and fuel prices issues in this country, which make it very hard to determine which way the market is going to go. But that has not stopped us from investing here. We are investing in both our Talegaon and Halol (factories), where we are adding a new press shop and additional capacity. If the market dictates we have the option to go beyond the 140,000 (production capacity) at Talegaon, if necessary.

In terms of R&D what is the role your centre in Bangalore is playing at the moment and where do you want that to go?

I think the technical centre in Bangalore is a highly sophisticated one and totally integrated with our global research and development capabilities. What is great about our centre in Bangalore is the ability to move data and information on a 24×7 basis. For example, there are projects being developed in North America but because there is total integration we can farm out that work to colleagues in Bangalore. This centre serves both global GM in terms of supporting it around the world and also helps with the adaptation of vehicles meant for India.

The dual pricing of fuel in the country has meant there is a huge disparity between diesel and petrol prices in the country. Even cars like Chevy Beat (petrol) are finding it difficult to find buyers. What does it mean for a manufacturer like GM to operate in such a scenario?

GM has a unique advantage in this area. The Talegaon plant has the ability to flexibly manufacture gasoline and diesel engines. It is the only plant in the world that GM operates to have such flexibility. We have the capability to respond if the market moves towards diesel very quickly and we want to continue having that flexibility. I think from a fuels perspective, India is one of the most complex markets in the world. I cannot think of any other market which has petrol, CNG, LPG and diesel all together in the same place. I think there is still consumer demand for LPG and we can easily adapt to it because of vehicles like Spark in our portfolio.

You have to go where the market goes and at the moment customers are mad about diesel cars. In our future portfolio we need to ensure that we have the capability in our core products to offer very competitive diesel power trains.

There are certain products which have not seen any changes in more than two years. Cruze is one such example. Can we expect a new Cruze to hit the market soon?

The Cruze is a very important model for GM and, in fact, one of the most successful cars in the world. It is a big hit in China, North America, and here. We would be refreshing that model on a global basis and India would be part of that refresh when it takes place. If you look at the timeline of these vehicles, it gets predictable as to when it will get refreshed. We have established a real hit with the Cruze and it is a product that I am very proud. This is one product that we will refresh on a very consistent basis.