General Motors has completed 14 years in India and wants to triple sales here in the next two years. Karl Slym, president and managing director of General Motors India, speaks to Probal Basak on plans and his dream of turning the Indian arm into an Indian company with a global product from here. Edited excerpts:
You recently launched the Chevrolet Beat’s LPG version, with a locally developed Smartech engine. What is special about it and what is your expectation from this launch?
The engine developed by our technical centre in Bangalore, in co-operation with GM's new engine plant in Talegaon (Pune), is suitable for Indian roads and climatic conditions. This is not for global use. The technology is from India and for India.
On expectation, we have got a very good initial response. There is a market for CNG/LPG cars, since it is cost-effective, and we expect around 15 per cent rise in overall sales of the model.
Would you like to use this engine in other models, too?
There is always the possibility that we will expand the use of this engine. GM has always been in the frontline when it comes to offering alternative fuel options.
When will you launch hybrid or electric cars in India?
We are already there in the electric vehicles market, globally with cars like Chevrolet Volt or the Cruze electric. Some time in April, we will showcase a production-ready mini electric car in India. But that will not be for immediate sale. This is a step towards introduction of electric vehicles. It is not possible to give an exact time frame. It depends on the market response.
What gives you the confidence to introduce such cars when Honda had to stop selling its hybrid Honda Civic in India due to cost-ineffectiveness? Will the budget sops for hybrids and electric cars help the industry?
People will not buy an electric vehicle just because it is a green car. You have to see that it is not beyond the reach of customers. Showcasing the mini-electric car will help us asses the market. We want to use it as a knowledge-gathering process.
There is duty exemption on import of specified parts of hybrids and a concessional rates’ excise duty. But you need to have the infrastructure here to do the assembling or domestic production of such vehicles, which will take time. I think the good part of the Budget was the setting up of a national mission for hybrid and electric vehicles, which can turn out to be a very good move in the long term.
What are the new models and variants you plan to launch this year?
Over the next two years, we are going to launch six new models and 14 variants. Of the six models, two will be LCVs (light commercial vehicles) and the rest will be SUVs, hatchbacks and sedans.
Last year, we conducted a survey to assess the potential for GM's premium cars like Pontiac, Buick and Cadillac in India, which proved that Cadillac has the strongest brand recognition. We don't have any immediate plan of entering the segment; in the long run, we can consider it.
What is coming from the stable of your Chinese partner, Shanghai Automotive Industry Corporation?
We will enter into the light commercial vehicle (LCV) segment with two formats in the next two years, and these will come from the stable of SAIC. These will be designed by them.
You said earlier that GM expects to triple its sales in India over the next two years. What are your plans to achieve the target?
The year 2010 has been the best for us. Sales were up 60 per cent from the previous year and we crossed the 100,000-mark for the first time in India. The industry is expected to grow by 12 to 15 per cent this year. We would like to grow at double that rate.
Our target is to reach the 200,000 mark in 2012 and 300,000 in 2013. With the expansion of our capacity and introduction of new models and variants, we will achieve our target. The company has invested $1 billion (Rs 4,500 crore) so far and will invest $500 million in India over the next two years.
GM is celebrating 100 years of its global operations in 2011. Any special plans for India?
This is a proud moment for us. GM India is currently the fifth largest car maker in India and we will continue to grow faster. Our technical centre here has got immense potential. Our dream is to come out with a product for the global market which will truly make us an Indian company.