GM's 2010 India sales set to double


General Motors expects to double sales in India this year and to double its share in that market in the longer term with the addition of commercial vehicles it plans to begin making with its joint-venture partner, China's SAIC.

"We're doing incredibly well with passenger cars. We're going to double our volume this year," Tim Lee, president of GM's international operations told Reuters on the sidelines of the Beijing auto show.

GM expects sales in India to nearly double in 2010 from 2009 levels, topping 130,000 cars from near 70,000.

In addition, Lee said that the GM's international operations had contributed to what executives led by Chief Executive Ed Whitacre have described as a 'solid' first quarter.

GM's international operations, including sales in China, India, Russia, the Middle East and Africa "will contribute significantly to the company" in the first quarter, Lee said.

"I would just say as a reflection on what Mr Whitacre has said that it was a very solid performance," Lee said.

Earlier this month, GM reported a $4.3 billion 2009 net loss covering the period from its emergence from bankruptcy in July 2009 through the end of the year, in the automaker's first full account of its new balance sheet as a restructured company.

"The last 18 months in the US were very, very difficult for us. But as we came through bankruptcy in July, the momentum has really swung our way," Lee told Reuters.

Lee, 59, rose up the ranks of GM's manufacturing operations after graduating from GM's in-house university then known as GMI and oversaw efforts to slash capacity in the United States as the financial crisis deepened for the US automaker from 2007.

He was dispatched to Shanghai in December as part of an executive shake-up engineered by Whitacre, shortly after he took over as CEO. In a change in GM's organisation, Lee was given responsibility for sales in Asia led by China, as well as Africa, the Middle East and Russia.

Those markets represent over 40 per cent of GM's global sales and are on track to become a majority of sales in coming years. That puts the China-based operations headed by Lee at the center of prospective interest in an IPO that the Detroit-based automaker is preparing to launch as soon as this year.


Earlier this year, Lee chose to hire back former GM CEO Fritz Henderson as an adviser to the automaker's international operations and met with him as recently as this week in Detroit. Henderson, who was forced out as CEO by the board led by Whitacre, has valuable institutional knowledge as an adviser, Lee said.

"I took a little gas personally in the media for that (hiring), but he knows the European operation. He knows the Asian Pacific operations, he worked there. He knows Latin America," Lee said of Henderson.

The 2010 sales outlook for India is stronger than GM had expected just three months earlier but sales in the first four months of 2010 have topped the company's internal projections. GM had said in January that it expected sales in India of near 100,000 vehicles.

GM expects market share for the GM-SAIC joint venture in India to reach 8 to 10 per cent, up from just over 4 per cent now.

GM and SAIC began operating a new joint-venture in India in February as part of a deal that also gave SAIC a 51 per cent stake in the joint-venture the automakers operate in the booming China market.

Under the partnership in India, GM will remain focused on passenger cars, like the just-introduced Chevy Beat minicar, while SAIC will bring commercial truck production to India based on its Wuling models.

"We have no representation in commercial vehicles, so I would expect that we would basically double our market share in India over the next several years," Lee said.

Lee said it would take until the second half of 2011 before the GM-SAIC joint venture would introduce the first trucks built for the Indian market.

The Indian vehicle market is split in India with about 40 per cent of overall sales commercial trucks and 60 per cent passenger cars.

Although major automakers often decline to disclose market share targets, many see 10 percent share as an important threshold in emerging markets that can put operations on a stable footing.