Can the Sail at Rs 4.4 lakh alter GM's fortunes in India?

The Chevy Sail may have to shoulder the burden of much expectation as far as General Motors India is concerned.

The premium hatchback was launched today in diesel and petrol powertrains with prices beginning at Rs 4.4 lakh for the base petrol version. Other petrol variants also come at Rs 4.83 lakh, Rs 5.18 lakh and Rs 5.58 lakh.

The diesel lineup (where even the base model comes with twin air bags) starts at Rs 5.87 lakh followed by two other variants at Rs 6.19 lakh and Rs 6.92 lakh.

GM is slowly refurbishing its entire product lineup - earlier this year new versions of the Tavera (BS IV emission ready), Captiva, Cruze and Spark were launched.

The Sail is replacing the Aveo UVA and before 2012 ends, GM will also launch the notchback version of Sail.

The Sail is rather successful product in other markets and GM isn’t wrong in hoping that it may turn the company’s fortunes in India as well.

In China, its home market, Sail’s performance has been remarkable and since its launch in 2010, it has sold 6 lakh units across 16 countries. GM has taken the popular 1.3 litre engine it developed in collaboration with Fiat, made it slightly better for India and strapped it on to the Sail diesel.

This, together with the pricing should help GM improve its performance in India. But will a new product be enough to improve the perception of GM in the eyes of the Indian car buyer?

Even Beat diesel (as well as petrol) is positioned at a competitive price point with highest fuel efficiency in its segment, but hasn’t been selling as well as some of its competitors.

Lowell Paddock, President and CEO of GM India, said that the Beat’s performance left a lot to be desired and he was reassessing the pricng and overall communication strategy for this car. But Lowell was also at pains to explain how the B1 segment of the passenger car market was in decline and this was impacting sales of the Beat as well as Spark mini. But unlike B1, the B2 segment - where Sail has been positioned - has been expanding so that the launch of this vehicle would benefit GM in the long run.

Paddock declined to give either the sales target for Sail or the company’s overall sales target this year, merely saying he hopes to at least sell as many vehicles in India this calendar year as last year, at 1.1 lakh units.

Recently, General Motors Co bought back most of the 50-percent stake in its Indian operations that it had sold to Chinese partner SAIC Motor, regaining control of the JV.

GM raised its stake in the venture to 93 percent and Paddock said today that this deal did not change anything as far as operational matters were concerned. It must be pointed out that Sail is the first product of the GM-SAIC JV which is being launched in India. A larger passenger van from SAIC’s stable, the Chevy Enjoy, will also be launched here before December. GM and SAIC announced the formation of the 50-50 joint venture in December 2009, after the US automaker had restructured its operations in US bankruptcy court.

GM included its two assembly plants, engine plant and sales network in the Indian partnership. GM’s India car sales fell 21 percent in the first six months of the FY13 when overall industry car sales slipped 0.3 percent in the same period. In October, GM sales fell by almost 40% compared to the same period in 2011.