The Hindu Business Line : GM plans engine, gearbox plant

General Motors India, which recently announced a greenfield car project in Maharashtra, is now planning to set up an engine and gearbox (powertrains) manufacturing plant in the country.

The company is currently doing the `due diligence', said Mr Rajeev Chaba, President and Managing Director, General Motors India.

The new plant is most likely to cater to the small range of diesel engines (between 1.2 - 2.0 litre), though the company is contemplating adding petrol engines. No call has yet been taken on the location of the plant or the quantum of funds to be invested. Analysts said a plant of high-volume production capacity catering to powertrains for the largest segments (small car and mid-size) present in India would infuse an investment in the region of $223-335 million (Rs 1,000 - 1,500 crore).

Diesel variants

One of the primary reasons for setting up a powertrain plant is to cater to the growing demand of diesel variants in the country, especially in the segments (B+, C and D1 segment) where General Motors is and will be present in the near future. Furthermore, the powertrain plays a major role in the indigenisation of any model.

Even as the plant fits into the indigenisation strategies of the company, it could also meet the growing demand for low-end petrol and diesel engines in the global arena. The Korean plant that GM recently set up is feeding high-end diesel engines (2.0 litre and above) for most of the Chevrolet models. As of now, GM does not have a diesel range available in the sub 2.0-litre engine category, said senior officials.

Mr Chaba said the reasons for choosing Talegaon, Maharashtra, for the greenfield car project, was its proximity to the port, keeping exports in mind. "We shall first cater to the domestic demand (phase 1) and then look at exports in phase 2 after servicing local demand." GM is not ruling out the possibility of making the country a global hub for small cars too, "though that is not our primary focus as of now", he added.

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