GM-SAIC confident of replicating China success story in India

Murali Gopalan Mumbai | Updated on October 09, 2012

Mr Lowell C Paddock, President and MD, General Motors India (file photo). -- Kamal Narang

General Motors is confident that its partnership with China's SAIC Motor Corp will work to its advantage in India.

Mr Lowell C. Paddock, who recently took over as President and Managing Director of GM India, was in China for seven years prior to this assignment. While his company is the market leader there, it is yet to make a significant dent in India despite being around for over 15 years. Will this change now with the SAIC alliance?

“GM-SAIC is a strong partnership largely because of the capabilities both partners bring to the table. We are tightly aligned with our SAIC colleagues and when you look at the variety of products they can assist us with, we think those are vehicles which will do very well in the Indian market too,” Mr Paddock told Business Line.

Two of these were unveiled at the Delhi Auto Expo, the Sail compact car and a multipurpose vehicle, and the idea is to bring more ‘value-focused' products in the coming years. The GM-SAIC combine believes there is no reason why the China success story cannot be replicated in India. “If you look at our growth in China, it has not happened by accident. It is because of capability, quality and the ability to move fast. The race is eventually going to go to those who can move the quickest and most efficiently,” Mr Paddock said.

The India partnership with GM is equally critical to SAIC, which is keen to go global in a big way. Reports have been doing the rounds that it will next explore the option of entering other ASEAN markets such as Malaysia, Indonesia, Thailand and the Philippines.

More recently, the GM-SAIC combine announced that it would commission a new vehicle plant in Egypt where kits would be shipped from China. “We are also expanding in several South American markets and there are many others to follow. Our focus right now is on India where there is a lot of opportunity to grow. We will continue to make major investments in developing markets with globally competitive products,” Mr Paddock said.

The global crisis of 2008-09 saw GM on the verge of bankruptcy and this was the time the SAIC alliance for India was sewn up. The partnership has been critical to the American automaker's China leadership script and will now be tested in other parts of the world.

“This is an alliance where one and one equals a lot more than two. In 2004, if someone had told me we would localise our global architecture over four years, a lot of us would have been sceptical. The fact we did it reflects the tremendous capability of our partners,” he said.

For a company that was virtually in an abyss just three years ago, GM has bounced back and ended 2011 as the world's largest automaker, ahead of Volkswagen and Toyota. Its global operations (which exclude the Americas and Europe) accounted for over a third of the nine million units sold and this component will only grow in the coming years with Brazil, China, Russia and India leading the fray.

Published on January 27, 2012

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