Move to Take-Over Shuttered Assembly Facility Should Strengthen GM India
While China has been all the rage for automaker expansion over the last couple of years, continuing development of the continually expanding Indian market has been almost a non-issue, despite its near billion person population and middle class that surpasses Canada and the United States combined in size.
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| Seeing India as a ripe market, General Motors has put in an offer to purchase the assembly assets of Daewoo Motors India Ltd. GM will build a mini-car in the new plant that is smaller than the current South Korean built Chevrolet Aveo subcompact (shown). (Photo: Alexandra Straub, Canadian Auto Press) |
Granted, India already has a relatively strong automotive sector, but there is definitely room for growth (a major understatement) and not all automakers are present in the market. GM already has invested in India however, under its GM India division that encompasses retail outlets, a manufacturing plant at Halol in the state of Gujarat and a new GM Engineering Center in Bangalore.
Seeing that opportunity is still ripe, General Motors Corporation has submitted an offer to purchase the assembly assets of Daewoo Motors India Ltd. (DMIL), a similar move it made recently in South Korea.
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| The Daewoo India plant currently has an annual production of 85,000 vehicles. GM has plans to retool it for mini-car production. Shown is the Epica, Chevrolet's midsize entry from GM's South Korean GMDAT division. (Photo: Rob Rothwell, Canadian Auto Press) |
As recently reported the offer has been accepted by the principal creditors of Surajpur-based DMIL (ICICI Bank, IDBI and Exim Bank), but is still subject to the approval of the GM's respective boards, the affected creditors, as well as judicial and governmental authorities. The deal would see GM owning 100 percent of DMIL's vehicle assembly assets.
He DMIL plant's capacity allows for annual production of 85,000 new vehicles, and according to sources will be retooled to produce a mini-car for the Indian market, expected to arrive within a year's time. No doubt this car will be saleable in other markets, while plant expansion would allow other models to be built alongside the mini-car.