Karl Slym has spent two years trying to change the customer perception about General Motors in India with some success. The company is eyeing 70,000 unit sales this year and over one lakh in 2010. Now that parent GM Corp has signed an equal partnership deal with China’s SAIC Motor Corp and identified India as this alliance’s first priority market, Slym has a lot more work on hands.
The alliance is targeting three-fold growth in volumes by 2012 in India, banking on the Chevy brand of passenger cars and commercial vehicles which come in by 2011. Slym is tasked with product planning, marketing, distribution and branding strategies for GM’s CV foray. Excerpts from an interview with DNA Sindhu Bhattacharya:
What does the GM-SAIC deal mean for India?
This deal will change the ownership of GM India, which now rests with GM affiliates in Korea and Australia. Under the new ownership, we can enter the high volume light commercial vehicle segment and also launch SAIC passenger cars in India. With this deal, I don’t see why we can’t triple sales volume in three years with an expanded portfolio.
Which CVs will be brought here and how will distribution and branding be done?
We have pickups, people carriers and vans under the SAIC portfolio and our competition will be Maruti Omni and Tata Ace. The CVs will be manufactured at the Hallol facility and we will move production of all our passenger vehicles (except the Tavera) to the Talegaon site for this purpose. The first commercial vehicle should be in the market by late 2011. We plan to establish a separate sales and distribution network for the CVs — customers for the two kinds of vehicles are different. Also, CVs will be sold under a completely new brand.
What about other products from this alliance? Will SAIC cars also be launched here?
We plan to bring some cars from SAIC portfolio too, but not necessarily small cars.
But there won’t be any completely built unit (CBU) import of cars, we will take the SAIC architecture and then build that car in India, using Indian supply base. And the branding strategy is very clear: all passenger cars will fall under ‘Chevrolet’ (even if they are from SAIC) and all CVs would get the new brand name we decide on. We will not be using the Wuling brand name SAIC uses to sell CVs within China.
GM has already committed a billion dollars as investment in India. What about future investments, especially after the SAIC alliance?
We will need substantial investments in the second phase of vehicle and powertrain manufacturing at Talegaon. Money will also be needed to establish the new CV brand name and put in place a completely separate sales and distribution network for these products. As of now, the valuation of GM India’s owned assets stands at between $300 million and $350 million, taking into account the Hallol facility and money used in phase one of Talegaon (vehicle plus powertrain). I cannot put a figure to total investments needed right now.
GM continues to be a marginal player in the Indian passenger car market. How do you think customer perception has changed for the company?
Even two years back, Indian customers would not consider the Chevy brand before buying their car but that perception has changed. Our research shows that 30% more people now consider buying a Chevy than before. However, we remain a challenger brand... A lot of Indians still wake up in the morning, convinced they want to buy a Maruti. We are already in the small car space with Spark and Aveo and the mini car Beat is coming soon. This should enable us to cross the one-lakh-units sales mark next year. By 2012, we should more than double market share with cars and CVs together. Several new products such as the Aveo CNG, Cruze Automatic, and Electric Spark are also on the anvil.
Any regrets, anything GM India should have done differently specially during the global meltdown and when your parent company declared bankruptcy?
No regrets. But in hindsight I feel we were not ready enough to take advantage of the market sentiment when growth returned after global meltdown and our parent’s bankruptcy announcement. Our supplier base and production wasn’t prepared enough. But now we are back on track. Even one year back, spare parts availability was an issue but now we are in perfectly good shape on this front too.
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