GM working on marketing plan for India K. Giriprakash Seoul , April 7 GENERAL Motors (GM) has ranked India as the third most important emerging market among eight countries while South Korea, where it already has a joint venture, is ranked fifth. The first two countries in the `emerging markets' list are China and the US. Mr Nick Reilly, GM-Daewoo Auto & Technology Ltd (GMDAT) President and CEO, told a group of visiting journalists that GM was working on a major strategy for India. This which will enable it to enter the booming small car market. "The marketing strategy has not been finalised yet. "But we would like to be in the small car segment," Mr Reilly said. He added that the experience in South Korea where GM took over the Daewoo plant should help the company to fine-tune its strategy as and when it takes over the Daewoo plant in India. GM is currently carrying out the due diligence of the Daewoo plant near New Delhi. This is expected to be over in another two months. Analysts said that while the acquisition in South Korea enabled GM to penetrate into that country's closed market and acted as a springboard to China, the acquisition of the Indian plant will enable it to access the booming small car market. GM entered the race to acquire Daewoo after Ford Motor Company abruptly withdrew from negotiations. The company reportedly paid around $ 400 million to acquire the stake in Daewoo along with Suzuki and Shanghai Auto Industry Corporation. GM has 42 per cent stake in the company. Suzuki has 15 per cent stake, Shanghai Auto Industry Corp has 10 per cent and Daewoo creditors 33 per cent. Mr Reilly said that after it took over operations in October 2002, the company's market share in South Korea has increased to 9.7 per cent. But the company competes in only 38 per cent of the market in which its share is around 25 per cent. It has, however, received strong exports orders that posted a growth of around 98 per cent. GM exported its sedan, Lacetti, as Optra to India as and Buick Excelle in China. The Lacetti is GM Daewoo's first global car and has been rolled out in over 100 markets. The company recently announced that it plans to invest around $1.5 billion in two new powertrain and a diesel engine facility, two new vehicles, an upgraded product and one new generation of small cars. Mr Reilly said that GMDAT was developing a sports utility vehicle and a large car that would enable the company to fill the gap in its portfolio. Though it has been tough to restore the image of Daewoo, the company has been successful to a large extent, according to him. GM Daewoo has added nearly 3,000 employees since its launch including 700 former employees who had been laid off by the old Daewoo Motor. Over the next three years, GMDAT plans to invest around $1 billion in research and development. It recently added a new design centre to create the next generation of GM Daewoo vehicles. Mr Alan Batey, GM Daewoo's Vice-President for Commercial Operations, said that though Hyundai is the leading car maker in South Korea, GMDAT wants to be the new source of innovative high-value product for GM's worldwide operations. Mr Steve Clarke, GM Daewoo's Managing Director for Product Engineering, said that the J200 platform - on which Optra, Lacetti and Nubira have been built - was first introduced in the domestic market and later exported to other countries. NEW DELHI, 27 JAN: Admitting mistakes in its Indian strategy over the past decade, US auto major General Motors today said it would focus on developing products that are tailored for the local market to drive a profitable and sustainable growth here. The company, which launched its locally-developed engines to be utilised for the Indian market today, also said as it was executing a 'course correction', it expected to have a significant marketshare here, as it does in other emerging markets like Brazil, China and Russia. “General Motors in India has made mistakes in the past. We have been inconsistent in our product portfolio plans, we have been inconsistent in our resource allocations,” General Motors international operations president Mr Tim Lee said. Over the last decade, the performance of the company in India has been “spotty”, he added. “That time is over. We are focused now in understanding each market segment, what does the customer need, what does the customer want. Our plan is to upgrade our portfolio to meet those demands,” Mr Lee said. Compared with other emerging markets ~ Brazil, (where it has 20 per cent marketshare in passenger vehicles segment, China (13 per cent) and Russia (nine per cent), he said India had had the least resource allocation by GM in the last decade. “If we change that precondition, you could expect that we would like to see better business results (in India),” Mr Lee said. He, however, declined to forecast a target that the company would like to achieve in India. The firm, which has been operational for 14 years in the country, currently has four per cent share of the passenger vehicle market that stood at around 2.3 million units in 2010. Mr Lee, however, ruled out any short-term measures to fast-track growth in India. “(Our) target revolves around profitability and sustainability so that we can fund further investment and development in India...We don't want to go out and borrow money from different places to fund the growth,” he said. Commenting on the new 1.2-litre petrol engine that has been developed to suit the Indian conditions, he said it would be used for the compact car 'Beat' here, although it could be exported to other similar emerging markets in future. GM India president and managing director Mr Karl Slym said a diesel version of the engine would be launched in the second quarter of this year. Both the petrol and diesel engines will be produced at its Talegaon plant. Last year, the company inaugurated the plant that has been set up at an investment of $230 million with an initial capacity of 1.6 lakh power-trains, which can be scaled up to three lakh units. The India arm of US auto maker General Motors, or GM, is in the midst of a DNA change. The metamorphosis is an offspring of the 50 per cent stake Chinese auto giant Shanghai Automotive Industries Corporation, or SAIC, bought in the company in February 2010 for $650 million, or Rs 2,990 crore. The new GM India plans an audacious assault on the Indian market with no less than five Chinese cars in six months, starting January next year. "By combining the outstanding resources of GM with those of our partners in China, we can respond faster to the evolving domestic market than ever before," says Karl Slym, President and Managing Director of GM India. "It will help us emerge as a volume player in this market in the shortest time." The five launches will include a light commercial vehicle, or LCV. Slym's hopes are built on the success of the partnerships GM has forged in China, a performance that is in stark contrast to its India story. GM entered the two markets at about the same time in the mid-1990s. Over the years, the company has established itself as the Number Two auto maker in China with seven per cent market share; only German giant Volkswagen is ahead with 12 per cent. Thanks to its prescience in estimating the potential of emerging markets, 43 per cent of GM's sales today comes from the BRIC nations - Brazil, Russia, India and China - with China topping the list. In fact, so vital has China become to GM that the company held its last board meeting in the Middle Kingdom in September this year, the first outside the US. MUST READ: Can Karl Slym save GM India? Chinese onslaught SAIC holds 50 per cent share in GM India The JV will introduce fi ve vehicles in India next year; four will be unveiled at the January 2012 Auto Expo in New Delhi The cars will have Chinese design and core architecture; engines will be from GM The cars will give GM a portfolio of 12 passenger vehicles (not counting variants) in India, and one light commercial vehicle In comparison, Maruti Suzuki has 11 passenger vehicles, Hyundai has nine, Tata Motors fi ve, and Ford In the same period, GM's performance in India has been India, four lacklustre. It came with the Opel line, which had to be The five vehicles will allow discontinued after a few years and Chevrolet was brought GM India to better utilise in. The focus on sedans in the initial years - there was also its installed capacity of a station wagon - meant that GM had to be content with 470,000 cars per year. low volumes until it tapped the burgeoning small car In 2010/11, it produced a market with Spark in 2007 (see Market Share). So weak mere 108,529 cars was GM's image and brand recognition in India that Slym All cars will be branded says: "People did not know whether we were General Chevrolet and will not have Motors or General Electric." any Chinese messaging While Slym's sharp focus on the Chevrolet brand has addressed the brand recognition challenge, the launch of two small cars, Spark in 2007 and Beat in 2010, perked up the sales numbers.