India, expatriates high on GM agenda

Monday, 21 April 2003, 07:00 Hrs
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NEW YORK: U.S. car major General Motors (GM) will target Indian Americans with its mid-sized and luxury vehicles as the community offers a large market potential.

Gary Cowger, president of GM North America, says the "diversity market", especially Asian and South Asian communities, would be on GM's target group now.

"We have not done a good job in the past. The Asian community is huge. There is an Indian market for cars. There is a Korean market. The needs are different. We will selectively look at each segment and position the cars accordingly," Cowger said.

"We see that Indians do buy our Cadillacs and Buicks. But they buy a lot more of European and Japanese cars. We need to communicate better about our cars to these market segments," he added.

Cowger's views reflect a growing realisation among several companies about the propensity of South Asians, particularly Asian Indians, to buy large homes, jewellery, luxury cars and designer clothing.

Tariq Khan, vice president of multicultural marketing for MetLife, says Indians in the U.S. are a major market for luxury goods because of their high income and education levels. This market, he says, is also expanding fast.

This is borne out by the latest Census data, which say the Indian American population grew 105.87 percent between 1990 and 2000 to 1.6 million.

Indian Americans are also one of wealthiest and best-educated communities in the U.S., with a median household income of $60,093, compared with $41,110 for non-Hispanic white families.

This is what GM seems to be targeting.

Experts feel the cost of reaching out to the Indian American population is low because of the low cost of advertising with ethnic papers.

At the moment, while GM had a 28 percent share in the U.S. auto market, only nine percent of South Asians were buying the company's cars.

Monica Verma, staff project engineer for GM in the paint and polymers engineering division, said Indians look not only for the resale value of a car before buying one but also at four other issues -- brand equity, durability, fuel efficiency and safety.

"We want to understand these issues better -- how the Indian market differs from the general U.S. market. We will conduct surveys beginning with the mid-West," she added.

G. Mustafa Mohatarem, chief economist with GM, said India was among the eight countries identified by GM as "strategic economies". The other seven were Brazil, China, Malaysia, Poland, Russia, South Korea and Thailand.

"We expect the maximum growth for GM's external presence to come from these countries," he said.

Talking of India, he said GM's association with the Suzuki Motor Company of Japan would be better utilised in the future.

"We have 20 percent stake in Suzuki Motor Company of Japan. And Suzuki is the majority holder of Maruti Suzuki Ltd, which is the largest car manufacturer in India with a 50 percent market share," Mohatarem said.

"Our joint strategy for India is: we will be concentrating on the mid-sized and high-end segment, while Suzuki will cover the economy segment."

GM, the chief economist said, has also conveyed its "expression of interest" expressed interest in acquiring government stake in Maruti Suzuki and adding more models under the Opel platform over the next few years.

He said plans were also being drawn up for expanding a factory in Halol, Gujarat, and work is on for a large software research and development facility in Bangalore.
Source: IANS
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