Small-car for India is big draw for GM-Shanghai Auto

General Motors' move to develop small engines and transmissions with China's SAIC Motor Corp could have tremendous implications for India, industry sources said.

This follows the news of the American automaker going in for its IPO where its long-standing Chinese ally could pick up a stake in the process.
GM and SAIC have formed a 50:50 joint venture for their Indian innings which will first see the rollout of light trucks from GM India's plant in Halol, Gujarat.
“The bigger play, though, could be small cars which account for a lion's share of India's automobile sales and this is where the small engines alliance will play a key role,” sources said.

GM and SAIC plan to make fuel-efficient engines ranging from 1 to 1.5 litres which are intended to be used in China and other parts of the world. It is here that the two could look at fitting them in low-cost cars for India, which would ideally be priced in the Rs 2-lakh range to take on the Tata Nano.

The GM-SAIC combine plans to launch three cars and two light trucks by end-2012 and it remains to be seen if a ‘people's car' will be part of this product line-up. GM already has offerings in the form of the Chevrolet Spark and Beat, but these are in the Rs 3 – 4 lakh price range. “An option in the Rs 2-lakh bracket will be a big attraction to customers with limited budgets,” sources said.
Reports have been doing the rounds that market leader, Maruti Suzuki, is planning a stripped-down version of its top selling model, Alto, which will be priced at Rs 2.5 lakh.

Closest rival Hyundai is working on a similarly priced car which will hit the roads next year.