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GM working on marketing plan for India

08-April-2004
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GM working on marketing plan for India

General Motors (GM) has ranked India as the third most important emerging market among eight countries while South Korea, where it already has a joint venture, is ranked fifth.

The first two countries in the `emerging markets' list are China and the US.

Mr Nick Reilly, GM-Daewoo Auto & Technology Ltd (GMDAT) President and CEO, told a group of visiting journalists that GM was working on a major strategy for India.

This which will enable it to enter the booming small car market.

"The marketing strategy has not been finalised yet.

"But we would like to be in the small car segment," Mr Reilly said.

He added that the experience in South Korea where GM took over the Daewoo plant should help the company to fine-tune its strategy as and when it takes over the Daewoo plant in India.

GM is currently carrying out the due diligence of the Daewoo plant near New Delhi.

This is expected to be over in another two months.

Analysts said that while the acquisition in South Korea enabled GM to penetrate into that country's closed market and acted as a springboard to China, the acquisition of the Indian plant will enable it to access the booming small car market.

GM entered the race to acquire Daewoo after Ford Motor Company abruptly withdrew from negotiations.

The company reportedly paid around $ 400 million to acquire the stake in Daewoo along with Suzuki and Shanghai Auto Industry Corporation.

GM has 42 per cent stake in the company.

Suzuki has 15 per cent stake, Shanghai Auto Industry Corp has 10 per cent and Daewoo creditors 33 per cent.

Mr Reilly said that after it took over operations in October 2002, the company's market share in South Korea has increased to 9.7 per cent.

But the company competes in only 38 per cent of the market in which its share is around 25 per cent.

It has, however, received strong exports orders that posted a growth of around 98 per cent.

GM exported its sedan, Lacetti, as Optra to India as and Buick Excelle in China.

The Lacetti is GM Daewoo's first global car and has been rolled out in over 100 markets.

The company recently announced that it plans to invest around $1.5 billion in two new powertrain and a diesel engine facility, two new vehicles, an upgraded product and one new generation of small cars.

Mr Reilly said that GMDAT was developing a sports utility vehicle and a large car that would enable the company to fill the gap in its portfolio.

Though it has been tough to restore the image of Daewoo, the company has been successful to a large extent, according to him.

GM Daewoo has added nearly 3,000 employees since its launch including 700 former employees who had been laid off by the old Daewoo Motor.

Over the next three years, GMDAT plans to invest around $1 billion in research and development.

It recently added a new design centre to create the next generation of GM Daewoo vehicles.

Mr Alan Batey, GM Daewoo's Vice-President for Commercial Operations, said that though Hyundai is the leading car maker in South Korea, GMDAT wants to be the new source of innovative high-value product for GM's worldwide operations.

Mr Steve Clarke, GM Daewoo's Managing Director for Product Engineering, said that the J200 platform - on which Optra, Lacetti and Nubira have been built - was first introduced in the domestic market and later exported to other countries.

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