General Motors to enter the "low-cost car" war

  • General Motors has decided to make a pitch in the low-cost car segment
  • Plans to roll out a mini car priced between $3500 and $4000 (Rs 1.4-1.6 lakh approximately) in India ( cheaper than the Maruti 800, little dearer than the Tata Nano (approx. $2500) )
  • 'Chevrolet Spark' is the company's current cheapest model in India costs about $7,000 (Rs 2.8 lakh)
  • The car would also be pitched in other regions like Latin America, Eastern Europe, Africa and "possibly China". 
  • Looking at a minimum production capacity of 200,000 units.
  • To be manufactured in India.
  • India advantage
    • Indian engineers have "first-hand direct knowledge" of such products.
    • A good supplier base
    • Low distribution, marketing and advertising costs in India 
  • The company would look at some common component sourcing between the proposed low-price car and some of the other cars to help keep overall component procurement costs low as they may source as many as half-a-million units from a particular supplier to be used across models, including the low-price car
  • The company's design, engineering and R&D set-up at Bangalore will also play a major part in the car's development.
  • Production could be at the company's upcoming plant at Talegaon in Maharashtra.
- Contributed by Vaibhav Agarwal