GM-SAIC JV Still Warm To Save Indian Operations

GM has toned down the prevailing concerns over the health of its relationship with Chinese partner SAIC Motor Corp., stressing on their ability to produce low-cost cars which is critical to the company's plans to bring in decent cars with prices acceptable to the growing middle class buyers in the South Asian markets. "Products we're producing out of our joint-venture operations with SAIC serve up very well in emerging countries," said Bob Socia, GM's chief, in a recent interview.

The SAIC reversed its stake from 50% to 9% in October partly as a result of fall in GM's sales in India in the first half of the fiscal year that began in April. It proved costly for the partners to convert two low-cost small cars they sell in China into right-hand-drive versions for India, delaying key products and let to the dampening effect. GM says that the Shanghai-based state-owned automotive group will continue to help GM develop "value cars" for India and other emerging markets in the South Asia.

This bring a sight of relief to the Chevrolet India, as GM had great plans of introducing few cost-effective cars from the SAIC stable. The Sail U-VA is already here, which is to be followed by a three-box sedan version. Next in the  line is a seven-seater MUV, Wuling Hongguang, rechristened for India as "Enjoy". Wuling Automobile Co Ltd owns a 15.9% stake in the SAIC-GM-Wuling Automobile, a joint venture involving GM in China.

Wuling Hongguang which will be renamed as Chevrolet 'Enjoy'

The three cars are of boundless importance to the Chevy India. The company has lost a major share of its sales and there aren't much of new offerings in the recent times to compete in the expanding market. The Aveo U-VA and sedan made poor sales records and were in the verge of phase out. The Sail U-VA's launch is a good move to bring down the market share of other premium hatches and break the Swift's stronghold. Its sedan version will occupy the vacuum the company created in the 7-9 lakh segment.

The Chevy Enjoy, which was showcased at the 2012 Delhi Auto Expo, is the company's new talisman to crack the new yet bloating MPV market, which is overwhelmed with the entry of the Ertiga, Evalia and Quanto. The car will be manufactured at the company's facility in Talegaon, with other products sourced from China. The MPV is expected to enjoy sufficient engine options, shared assembling with Sail siblings and low pricing. However, the entry of Ford's EcoSport is a real headache for the Enjoy. Comparatively low pricing and building up service networks and brand credibility, unlike the Sail U-VA, is necessary to avert the possible debacle.

[This article was written for and has also been published in Indianautosblog ]