‘Chevy Beat diesel has done really well for GM’

This is an important year for General Motors in India. It will launch the first products of its joint venture with Chinese partner SAIC,
besides entering the fast-growing light commercial vehicle market. Also, 2012 may see the company expanding its global footprint by starting exports of Beat diesel to other right-hand drive markets. Sumit Sawhney, vice-president (marketing, sales and after sales), told Sindhu Bhattarcharya that SAIC partnership is helping GM to respond faster in the Indian market. Excerpts from the interview:

Q: The GM-SAIC partnership has been quite successful in China. How do you propose to replicate that in India? Two of the JV products — Sail compact and a multi-utility vehicle - were unveiled at the Expo recently. When will these be launched and how would you gain market share in the respective segments?
A: By combining the resources of GM in India with those of our partners in China, we can respond faster to the evolving domestic market than ever before. The JV helps us to offer new and exciting products faster and in a greater number of segments in both LCV and passenger car categories.

These are going to be manufactured at our Talegaon and Halol plants alongside GM’s portfolio. We plan to introduce Sail anytime after June and MPV in the last quarter of this year. Although it is too early to talk about market share, we are confident that our products will stand out against competition in terms of product attributes and price.

Q: Which other products developed under the JV will follow? By when would you enter the LCV market and which products would be launched in this segment? Will LCVs be sold through a separate distribution network?
A: We are working on a few product programmes whose details are still being finalised. We will share these details closer to the launch of the products. The MPV we are talking about is going to be in LCV category. We will go for the existing as well as new distribution network, depending upon the location and capabilities of existing dealers.

Q: Beat diesel has given GM in India good incremental sales numbers. But have you overtaken the Ford Figo yet? How do you think Beat diesel will perform in the coming months, given the domestic market’s rapid dieselisation?
A: We launched the Beat diesel only recently while the Figo diesel has been in the market for quite some time. But Beat, being the most fuel-efficient car in the category returning 25.44 km per litre, is doing very well since launch. It has already overtaken Ford Figo.

We expect Beat diesel to continue to perform well going forward as well.   The coming Union Budget too has a role of play, as the market continues to be sluggish and we are expecting an economy- boosting pronouncement for a turnaround.  In terms of comparison between Beat diesel and petrol, our diesel share is now 80% and petrol about 20%. But this is the case wherever there is an option of both diesel and petrol in any segment.

Q: Will GM begin exports of Beat diesel engines and the right hand drive Beat diesel cars this year?
A: Our first priority is to consolidate our position in India.  Exports are an option which we will look into at a later stage. The engine plant capacity as of now is 160,000 units per annum on a three-shift basis.

Sales of the Spark have been declining for some time. Any plans to phase out this car? Also, sources tell us that the Aveo hatchback and sedan would be phased out after the Sail hatchback and Sedan versions are launched later this year…
Sales numbers of Spark are on expected lines and have been doing well. We have no plans to phase out the car, as we keep upgrading our products at regular intervals to bring in value addition. So is the case with Aveo or Uva.  Having said this, every vehicle has a product cycle and we have to keep upgrading or introducing new products in a phased manner to create excitement in the market, failing which product fatigue sets in.  

Q: With the domestic market slowdown continuing, what sales and marketing initiatives have you undertaken to revive consumer interest?
A: We keep introducing innovative marketing strategies. This is the order of the day to keep the momentum going.  Some of the initiatives which we are introducing include focus on rural marketing, tie-up with banks for favourable interest rates, road shows, network expansion, customer loyalty programme, etc.