Argentum may make parts, Tavera for GM

With the auto sector driving into growth lane again, contract manufacturing firm Argentum Motors has revived talks with General Motors (GM) for manufacture of components and its sports utility vehicle (SUV) Tavera at its acquired plant in Uttar Pradesh.

According to sources in the company, GM is looking at sourcing skin panels and transmission (gear box) for its small car Chevrolet Spark from Argentum. The car major is also considering outsourcing manufacturing of its SUV to it.

“Last year, in March, we had done a detailed costing and given quotations to GM for components manufacturing, but due to recession the deal did not materialise. Now, with the sector coming out of downturn, we have revived discussions with them,” said a senior executive with the company.

The source said “looking at the dismal performance of Tavera” the car company wants to contract manufacture it rather than build it at its own plant.

“This way, the company will have the flexibility of altering its (Tavera’s) production as per demand and also control costs,” he said.

Argentum Motors, which is promoted by former Hyundai President B VR Subbu with budget carrier SpiceJet Ltd director Ajay Singh and Ashish Deora, has acquired Korean car company Daewoo’s plant on the outskirts of New Delhi at Surajpur in Greater Noida for contract manufacturing.

Company officials said talks with GM would be completed sometime in February. They could give the value of the contract that could be allotted to Argentum.

“We have to work out contract value. We will not be able to begin manufacturing for some time now because the conveyance (transfer of title) of property (Deawoo plant) is not yet complete,” said the official.

Earlier too, the company had initiated negotiations with auto majors like Daimler, Chrysler and others but had failed to seal a deal with them.