GM India,SAIC to amalgamate operations

General Motors India has entered into a joint venture with Shanghai Automotive Industry Corporation to develop common vendor base in India and go for cross-shipping of vehicles. Such a move by GM India will help it to tap cost benefits and sustain operations profitably in two of the world’s fastest growing automobile markets: India and China.

See More Chevrolet Beat Diesel Pictures                                               Read More on Chevrolet Beat Diesel

Karl Slym, President and MD of GM India placed his confidence in this deal by saying that there are opportunities to synergise our operations further and that the vehicles General Motors is developing in collaboration with SAIC will have high localisation levels. At the onset, the alliance will look to supply components to manufacturing units in China and cross shipping of vehicles may be considered later.

See More Chevrolet Beat Diesel Pictures                                               Read More on Chevrolet Beat Diesel

Out of the 440 suppliers in India, 200 have been selected by General Motors who will supply components for its global operations. It is expected that supply to China will start by end of this year or early next year. P Balendran, Vice President and Director (corporate affairs) at GM India said at present, the company is sourcing components valued at about $500 million in overseas markets. This is likely to go up to $1 billion by the end of the next financial year.

See More Chevrolet Beat Diesel Pictures                                               Read More on Chevrolet Beat Diesel

GM has an agreement with SAIC for operations in all emerging markets in Asia. It currently has eight joint ventures in China and to promote expansion, an investment company, General Motors SAIC Investment Ltd is also formed. GM India will launch 5 new cars in association with SAIC over the next 18 months. This would include two light commercial vehicles, a sports-utility vehicle, a sedan and a hatchback. The first one in the list will be launched at the Auto Expo next year.

See More Chevrolet Beat Diesel Pictures                                               Read More on Chevrolet Beat Diesel

By 2013, US based General Motors is aiming to touch a sales figure of 3,00,000 units in India. GM India produces its cars from two plants in India, one at Halol in Gujarat and other at Talegaon in Maharashtra.  The company has recorded a growth of 23% by selling 1,07,216 vehicles in the Indian market last financial year. GM India is investing $250 million to increase capacity at Halol plant from 85,000 to 1,10,000 units by the end of 2011.