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A major stirring is afoot in the small car market in India. General Motors, the world’s largest car manufacturer is all set to make an entry. The existing major players like Maruti and Hyundai are all watching warily.

General Motors first came to India nearly a decade ago, but it had left the small car segment well alone. Soon all that will change.

G Richard Wagoner, General Motors chairman and chief executive officer, will be in the capital in mid April to launch Chevrolet Spark. The car builds upon Daewoo's Matiz model, though Spark is two-generations ahead.

Wagoner is expected to meet Prime Minister Manmohan Singh, apart from addressing a specially convened joint session of the CII, the Society of Indian Automobile Manufacturers (SIAM) and the American Chamber of Commerce in India (AMCHAM). 

Wagoner will also visit the company’s technical centre in Bangalore, which has been in operation since September 2003, and which already undertakes engineering and research activities for General Motors' regional and global operations.

The entry into the small car market is expected to provide much needed volumes to the US automobile giant. General Motors India, (GMI) a wholly owned subsidiary of the US enterprise, has already raised the capacity of its existing plant at Halol in Gujarat from 60,000 units to 85,000 units per annum with an investment of Rs 100 crore.

The company is also setting up a greenfield plant at Ranjnandgaon with an annual capacity of 1.4 lakh units. GMI will be investing $ 300 million in the project (Rs 1400 crore), which is expected to be operational next year. 

GMI manufactured 36,000 units in 2006 and has drawn up an ambitious target of 66,000 units this year. Chevrolet Spark is expected to help the company achieve its goals. The company currently produces Chevrolet Optra, multi-utility vehicle Chevrolet Tavera, Chevrolet Aveo and Chevrolet Aveo U-VA.

Email author: djoshi@hindustantimes.com