The Hindu Business Line : Capacity constraints could be a speed breaker

GM's future strategy for the Indian market hinges on the success of the Chevy Spark. With the Spark, GM has had an excellent entry into the high volume small car segment. The Chevrolet brand couldn't have gotten itself a better ambassador.

For its price and positioning, GM has got a lot of things right with the Spark, the attractive price being one of the highlights, coming as it does, from GM. Relative to the competition in the premium hatch segment, the other positive points of the Spark are its build quality, performance and fuel-efficiency (generally, not considered a forte of GM's).

Despite so much going for it with the Spark, there could be one issue that may spoil the party for GM. Call it a temporary logistics issue, call it the inevitable delay that investment in a new plant entails or call it whatever else, the fact remains that if the company's production capacity constraint is going to lead to a big backlog of orders for the Spark, buyers just may not be willing to wait.

Back, up close.

The buyer in the small car segment is notoriously fickle-minded and generally a long waiting period is off-putting for them. And in many cases, the buyer will turn to some other car in the same segment, which is readily available.

GM has chosen to advance the launch date for the Chevy Spark, instead of waiting for its new manufacturing facility to be fully up and functional. It sure is beneficial to buyers in this segment. But we wonder if GM will be faced with more demand than it can produce now and a year down the line when the production capacity becomes available, whether the Spark would already be faced with new competition and, worse still, become dated.