On slow track: GM India has no time set for LCV launch

Meanwhile, the company today launched a completely new diesel variant of its premium sedan 'Cruze' priced between Rs. 13.85 lakh and Rs. 15.67 lakh

Sindhu Bhattacharya June 27, 2012 16:35:00 IST
On slow track: GM India has no time set for LCV launch

New Delhi: When Lowell Paddock assumed charge as President and MD of General Motors India this January, he probably had little idea about the mayhem in the global markets and consequent slowdown in the Indian market.

Within six months of being in India, Paddock acknowledges that the Indian vehicle market is one of the most complex in the world. It has enhanced focus on mini vehicles (small cars etc) unlike other BRIC countries or China, vehicle sales generate comparatively lower profit margins here and fuel prices keep fluctuating.

Given these complexities, Powell has had to take some tough decisions already. He has decided to postpone the launch of GM's first light commercial vehicle (LCV) in India, which was being developed in partnership with the SAIC of China. Speaking to Firstpost, Paddock said there was no new timeline for the LCV launch right now since the market for commercial vehicles wasn't very promising.

Plans to develop a car between the mini car Chevy Spark and the Beat hatchback have also been put on the backburner.

"We have gone back and forth on this, we have considered several aspects of developing such a car but in the current economic scenario, it makes little sense. The market for mini cars has seen a huge decline," he said.

Also, the Aveo UVA hatchback and Aveo notchback are being phased out by the third quarter of this year when the company will launch Sail hatchback and notchback- Sail is a product from the GM-SAIC joint venture in China which has been modified to suit Indian conditions.

Paddock said this modification of Sail -for example, making changes so it can survive the 47 degrees and more heat in India- have been done over the last two years and the car is now ready for a launch.

On slow track GM India has no time set for LCV launch

Paddock acknowledges that the Indian vehicle market is one of the most complex in the world. Photo:Firstpost

The two variants would be in the market during the third quarter festival season months and the hatchback is being positioned in the premium hatch segment like Maruti Swift.

Paddock also acknowledged that the mini car Chevy Spark has seen sales decline month on month. "This car has been ageing and also, the mini segment as a whole has been declining. We plan to bring a refreshed Spark by the end of the year".

So will Spark - like the Hyundai Eon and the new Maruti 800 - also sport an 800 cc engine? Paddock said that may be considered eventually.

And as if dwindling sales of the Spark and Aveo products are not enough, GM is now facing supply constraints on its best selling model - the Tavera.

Some labour issues at one of the suppliers - Argentum Motors in Noida - has slowed down production of Tavera and the car is now on a three month waitlist. Paddock dismissed any slowdown in the sales of the Beat saying that though the petrol variant was sluggish, the diesel one was picking up demand.

To a question on whether he sees the vehicle market reviving in the second half of the year, Paddock said he was cautiously optimistic. Already, sluggish market conditions have ensured that GM's two plants - at Talegaon and at Hallol - observe some no-production days to align supplies with demand.

The company did not produce a single vehicle last week and again, one day this week. But Paddock said since the facilities have the unique flexibility between diesel and petrol powertrains, it's easy to switch between production of these two types of cars based on demand projection.

Last year, GM India sold 1,11000 vehicles.

Meanwhile, the company today launched a completely new diesel variant of its premium sedan 'Cruze' priced between Rs. 13.85 lakh and Rs. 15.67 lakh (ex showroom Delhi). The new Cruze is powered by a 2 litre diesel engine with a 6-speed manual transmission.

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