GM wants to make India its new global auto manufacturing and export hub aimed at boosting sales in fast-growing emerging markets.
General Motors will invest $1 billion in the next few years to turn operations in India into a new global auto manufacturing and export hub aimed at boosting sales in fast-growing emerging markets, top executives said on Wednesday.
The investment is part of GM's plan to invest $5 billion over several years to develop a global family of Chevrolet vehicles with Shanghai Automotive Industry Corp (SAIC), the state-owned Chinese automaker that is GM's primary partner in China.
GM Chief Executive Officer Mary Barra said at a briefing in New Delhi that investment in India was expected to create 12,000 jobs at the company and its suppliers in Asia's third-largest economy.
GM will also launch 10 new domestically manufactured vehicles in India over the next five years in a push to double its market share in the country by 2020, Stefan Jacoby, GM'schief of international operations, told a news conference.
GM sold 56,700 vehicles in India in 2014 and had a marketshare of 1.8%.
With India dominated by Japanese and Korean automakers like Suzuki Motor Corp and Hyundai Motor Co, western firms like GM, Ford Motor Co and Volkswagen AG have found it tough to ramp up domestic sales.
Export Hub
GM's decision to make India an export base mirrors similar moves by Ford and VW, which are ramping up exports from the country to take advantage of low labour costs and profit from economies of scale.
"With this investment we plan to tap India's potential as a market and as a low-cost manufacturing base for the future,"Jacoby told Reuters in an interview.
The move is also seen as likely to take some of the strain off GM's South Korea operation. The automaker's operation there has been a low-cost export hub for years, producing close to a fifth of its global output, but has been overshadowed by rising labour costs in recent years.
However, the Indian expansion doesn't herald a gradual moveaway from GM's use of South Korea as an export base, Jacoby said.
He said, South Korea will continue to be a manufacturing and export base for automobiles designed for mature and developed markets such as the United States and Europe, while India will likely be harnessed as an export base for emerging markets.
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