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GM to to source components worth US$ 1bn from India over next 2 years Print E-mail
Written by Arjun   
Thursday, 11 August 2011
Bangalore: General Motors intends to source components worth US$ 1 billion in the next 2 years time from India for its overseas operations.

GM has around 444 qualified suppliers in India, of which nearly 200 supply to both domestic and global operations. The company has already awarded contracts to them for components worth approximately US$ 500 million. GM has a Supplier Footprint Optimization team in Bangalore, which works with Indian suppliers to improve their capability.

"Our target is always 100 percent localization, in order to be cost effective. We are constantly working towards increased local content in the products," said Karl Slym, President and MD, GMI. With the exception of a couple of precision parts and vehicle electronics, the rest is sourced locally.

GM India is investing US$ 500 million to expand existing capacity and to introduce new product lines at its Halol and Talegaon facilities.

It plans to launch five new products with 14 fuel variants over the next two years. This would include 2 LCVs and 3 passenger cars, including hatchbacks. An updated Tavera multi-utility vehicle will also be launched by end-2011.

GM India today launched "India's most fuel efficient car" - the new diesel Beat - which delivers a mileage of 24 kmpl (ICAT). The car will be available in three variants, with prices ranging from Rs 4.29 lakh to Rs 5.45 lakh. Powered by the smallest diesel engine in the market – the turbocharged 1 litre XSDE Smartech, the Beat diesel is expected to generate significant volumes for GMI.

The company expects combined monthly sales of the petrol and diesel models to touch 7,000 units.

"We want to double the industry market growth. So if the industry is growing at 12-15 per cent, our sales will grow at 24 per cent," said Karl Slym.

GM's Talegaon facility is currently manufacturing around 6,000 diesel engines and 3,000 petrol engines a month.

"The technology for the Smartech engine is from GM Europe, but it has been adapted to suit the Indian conditions specifically by the Technical Centre at Bangalore (GMTCI). It will be only in India that the Beat is available in a diesel option, nowhere else," said P. Balendran, Vice-President, GMI.

GM India employs close to 4,500 people directly at its operations at Halol, Talegaon, Bangalore and Gurgaon. This is expected to be increased by around 15 percent this year. It will also add 200-300 people at its Technical Centre in Bangalore.

The Halol plant in Gujarat is installed with an annual capacity of 85,000 units. With GM India’s plan to introduce Light Commercial Vehicles by end of 2011 or early 2012, Halol plant is presently undergoing capacity expansion. When completed in the next few months, Halol alone will have a capacity of 110,000 units.

Halol will manufacture light commercial vehicles in addition to other vehicles that are presently getting rolled out from the plant which include Chevrolet Spark, Aveo Uva, Chevrolet Aveo, Chevrolet Optra, Chevrolet Tavera and Chevrolet Captiva.

General Motors India’s second manufacturing plant at Talegaon in the western state of Maharashtra, with a capacity of 1,40,000 units, started production on the 2nd of September 2008, to meet both domestic requirements and future export potential. Both plants put together, GM India now has the capacity to produce 225,000 cars per annum.

The Talegaon Engine facility is GM’s first powertrain plant in the world that manufactures both petrol and diesel engines simultaneously. It has an initial annual production capacity of 160,000 engines and is designed to accommodate future expansion. The facility can manufacture engines up to 1.5 litres.

Since the plant manufactures both petrol and diesel engines simultaneously, scaling capacities according to market demand is not difficult. Recently, automobile manufacturers who had increased diesel engine manufacturing capacities in the wake of higher demand, were caught off guard when the Government announced the possibility of removal of the subsidy on diesel fuel used by passenger cars. Referring to such surprises, Karl Slym said that any changes that affect the industry have to be planned, so as not to adversely affect it.

For the Chevrolet Tavera, GM sources Rover-designed BSIV compliant diesel 2.0 litre engines from ICML and BSIII engines from AVTEC.

Both the Talegaon car manufacturing and engine plants have been constructed with a provision for further expansion like the Halol plant. Capacity can be increased by another 1,60,000 cars and 1,40,000 engines (per year) respectively in the second phase, to take the total Talegaon tally to 300,000 cars and 300,000 engines per annum – this will depend upon requirement.

The company hopes to add 50 more sales outlets by year-end to its existing 250 dealerships. These will mostly be in smaller towns.

Last Updated ( Thursday, 11 August 2011 )
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