Financial Daily from THE HINDU group of publications
Saturday, Jun 25, 2005
Financial Daily from THE HINDU group of publications Saturday, Jun 25, 2005 |
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Corporate
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IPR GM India seeks FIPB nod to pay royalty to GMDAT
Neha Kaushik
New Delhi , June 24 GENERAL Motors (GM) India has made an application to the FIPB for payment of both lumpsum engineering fee and royalty to GM Daewoo Auto & Technology, Korea (GMDAT). According to market watchers, the move is indicative of the company's plans to roll out new car models in the country from GMDAT's portfolio. The proposal, however, has been deferred for the time being by the board. The Department of Heavy Industry had sought deferring of the proposal saying that more time was needed to examine it. GM had made the application for payment of lumpsum engineering fee to GMDAT amounting to $9.4 million (approximately Rs 42.3 crore) over a period of three years and five per cent running royalty payment on each vehicle manufactured and sold by GM India with the technical knowhow given by GMDAT up to 2012. According to the FIPB, the proposal had been placed before it since the automatic route is not available for payment of lumpsum fee exceeding $2 million. Sources said that GM India is planning to roll out the Chevrolet Aveo, which is based on the GMDAT Kalos platform, sometime next year. The vehicle is likely to be positioned in the premium compact segment, which has seen a spate of launches over the last few months. GM India recently said that it plans to launch a minimum of two cars every year, beginning with next year, in order to garner a market share of 10 per cent by 2007.
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