The Hindu Business Line : US woes not to hit Indian vendors, says GM

Smooth drive: Mr Karl Slym, President and Managing Director, GM India, and Mr P. Balendran, Vice-President, at the launch of GM India’s Chevrolet Aveo U-VA in Bangalore on Friday.

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Bangalore, Dec. 5 General Motors, which plans to source $1 billion worth of auto parts from India, has said that the current crisis in North America will not affect local vendors.

The world’s largest auto maker also said that it plans to launch three new cars in India during 2009. It will also increase prices of its models between 2 per cent and 3 per cent next year.

The General Motors President for India, Mr Karl Slym, told Business Line that its operations in Latin America as well as in Asia-Pacific were robust and as the auto maker sells more cars outside North America, sourcing of components from Indian vendors will be of the same level as had been announced earlier.

General Motors has already sourced components worth about $500 million from Indian vendors so far. The rest of it will be sourced by 2010. There has also been no decrease in business for its partners in India with whom it has outsourcing contracts for its various requirements, he said.

Mr Slym said three new cars, the all-four wheel drive Captiva, Chevrolet Cruz and a mini-car, will be launched during 2009. The LPG and LNG versions of some of the existing models such as Optra and Aveo will also be launched next year. Chevrolet Cruz will be positioned above Optra while the mini-car, which will be launched towards the end of next year, will have engines of different capacities.

Hiring plans

Mr Slym said the car maker will hire another 500 employees next year for its Halol as well as Talegaon plants. General Motors employs about 4,000 people across its plants as well as its engineering centre in India. The car company has also announced that India will be its power train hub for Asia-Pacific. The company has invested about $1 billion in India so far.

“We are making operational profits since 2004,” General Motors’ Vice-President, Mr P. Balendran, said.

Between January and November this year, General Motors sold about 65,000 cars in India. For 2007, the carmaker sold 60,032 cars. It expects to end the current calendar year with sales of about 72,000 cars or about 20 per cent increase in sales.

Mr Slym said the carmaker has taken several steps to ensure that its dealers are not burdened with huge inventories. The inventory is not more than 45 days, one of General Motors’ dealers said.

Mr Slym said the key reason for slump in the passenger car sales in India was the drying up of credit and steep increase in cost of finance. “If the government can intervene and get the banks to lend more, the situation can be corrected,” he said.