General Motors India to invest $100m for small light commercial vehicles

General Motors India will invest $100 million to manufacture light commercial vehicles (LCVs) next year.

The company, which is now a joint venture between US giant GM and China’s top automaker SAIC Motor Corp, has already made it clear that the LCVs would be sold through a completely new sales and distribution network and there would be no sharing with the existing network for passenger cars.

“We will be investing $100 million in manufacturing LCVs in India next year. The investment needed in setting up a sales and distribution network would be separate,” GM India president Karl Slym told DNA Money.

The company plans to launch at least two LCVs in the sub-one tonne and one tonne category and these would be produced at the existing Halol plant.

When LCV production begins there, production of all passenger vehicles will be shifted to GM’s second facility at Talegaon.
Slym said the profile of LCV buyers and those coming in to look at passenger cars is quite different.

“We will give our existing Chevy dealers the first right of refusal (to also get into LCV dealerships) ….but typically, LCV dealerships are best suited in the semi urban and rural environment,” he said.

Not just separate sales and distribution network, GM also plans to launch LCVs under a completely different brand name - not under its flagship Chevrolet, which will be used only for cars.

Slym said that the hugely successful Tata Ace mini truck would be among his competitors and the company would initially stick to launching only one tonners.

“Though we do have a JV with another Chinese company, FAW, which is into medium and heavy commercial vehicles. But we are not entering these segments just yet”.

The first LCV should be in the market by end 2011.

GM India signed a 50:50 partnership with SAIC in February this year and under this partnership, LCVs from the Chinese partner’s stable are being manufactured in India.

GM India’s ownership earlier rested with affiliates in Korea and Australia. Slym said together with new car launches and entry into LCVs, GM India sales should triple by 2012.

He is eyeing over one lakh unit sales (69,000 in 2009) this year itself.