GM to launch second small car in India

GM to launch second small car in India

By SiliconIndia   |   Thursday, 20 March 2008, 03:51 Hrs
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New Delhi: General Motors will launch a second small car in India in the next two years. The company is looking at emerging markets to make up for sluggish sales in the U.S.

A late entrant in the country's small car market, GM sells the Chevrolet Spark at around Rs 300,000. "We need something lower than what we have now. If we could find a vehicle for less than that, it would not only benefit India but could benefit other places also," GM Group Vice-President David Reilly said.

Reilly did not disclose the price on target for the new model but said that it would not compete against the Tata Nano.

General Motors, which had launched the Spark last year, has a three percent share. It sold around 2,800 units of the car per month. The company has a manufacturing plant in Gujarat and is building a second facility near Pune in Maharashtra.

Reilly said sales growth in emerging markets would outpace any softening in established markets like the United States and would help maintain the firm's total global sales expansion. "I don't predict a slowdown, but this year, the U.S. would be tough," he said.

Helped by a lower excise duty of 12 percent (against 24 percent for bigger cars), small cars make up almost three quarters of car sales in India. The market leader in this segment is Maruti Suzuki.

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