General Motors to invest USD 1 bn in India

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SME Times News Bureau | 30 Jul, 2015
American automobile manufacturer General Motors (GM) on Wednesday said it will invest around USD 1 billion in India to augment production capacity and create 12,000 jobs locally.

"The Chevrolet brand is committed to India for the long-term. We will be investing about USD 1 billion into India in the next five years. We are delivering on our promise and doubling our investment in India," GM global chief executive Mary Barra said.

Earlier in the day, Barra, who has been credited with GM's recovery, met Prime Minister Narendra Modi here. The company has invested USD 1 billion in India since 1996.

The current investment is part of Chevrolet's overall USD 5 billion fund chest that the company intends to utilise to strengthen its business in global growth markets.

The automobile manufacturer aims to use the USD 5 billion investment to develop all-new vehicle family that will meet the rapidly changing demands of customers in Brazil, China, Mexico and India.

"This investment will help augment production capacity, develop new products and create 12,000 new jobs for GM India and its suppliers. It (investment) will also support the government's 'Make in India' programme," Barra said at an event here.

The company plans to augment its production capacity at its Talegaon manufacturing base in Maharashtra, increase the use of local materials and create excellent retail experience through its dealership.

The company has a target to introduce 10 new models specially designed for India and some of the fast developing countries in the world in the next five years.

The company will start launching the new global vehicle family by introducing sports utility vehicle (SUV) Trailblazer which will go on for sale by October this year.

The SUV launch will be followed by multi-purpose vehicle (MVP) Spin's introduction into the Indian markets by early 2017.

“The vehicles will be manufactured and sold in India and feature striking styling that has never been seen here before," GM's international president Stefan Jacoby said.

"They (vehicles) will also be exported worldwide. With this investment, our aim is to double our market share in India by 2020,” Jacoby added.

In 2014, the company sold 56,700 vehicles, giving it a market share of 1.8 percent.

The company's plans envision augmenting Talegaon plant's production capacity from 130,000 vehicles per year to 220,000 units by 2025.

The Talegaon plant will also become a global export hub for GM, with more than 30 percent of its annual production planned for markets outside India.

The company is aiming at exporting 19,000 units in 2015 and shipping-out 40,000 vehicles by 2016.

Ironically, the company's plans to strengthen its foothold in India also includes shutting down production at its Halol facility in Gujarat by the second half of 2016.

“Consolidating our manufacturing in a single location in India will support the long-term sustainability of our business in a challenging emerging market,” said GM India president and managing director Arvind Saxena.

The company's Halol facility in Gujarat produces 170,000 units per annum and provides direct employment to 1,100.

“This is not a decision that we are making lightly and we are committed to treating those impacted respectfully,” said Saxena.

The company informed that it is in touch with employees at the Halol facility to amicably shift production from there.

GM was established in India in 1996 in Halol. Its Talegaon facility was established in 2008. GM also operates the GM Technical Center-India in Bangalore, which was established in 2003.