GM to launch new small car for India in two years

Good news for Chevy fans in India! Within the next two years, GM India will roll out a small car to challenge the Maruti Wagon R, Estilo and the Hyundai Santro.

So will that be a tall boy, too? Perhaps, yes. GM will join hands with China’s Shanghai Automotive Industry Corporation (SAIC) to develop the small car.

But the new car from GM will have to be rich in features and, of course, priced low to take on the likes of the Wagon R, which sells more than 12,000 units per month, or the Hyundai Santro, which clocks over 6,000 units a month.  It must also ensure that the price of the new car must not overlap with the price of the Chevrolet Spark or even the Beat to avoid cannibalization within the company’s lineup. Based on these factors, we’re assuming the small car would be priced between Rs. 2.5 lakhs and Rs. 3.5 lakhs.

While GM has confirmed the news, it is tight-lipped about the car’s specifications. Earlier, GM was mulling a low-cost sedan option. However, the success of the Beat, a futuristic-looking small car, has led them to plan a similar car for a wider audience.

Experts feel that the GM-SAIC joint venture could do well owing to the high demand for low-cost products in both India and China. SAIC’s expertise clubbed with GM India’s distribution and service network could spell success for the new small car when it is launched. Besides launching a small car in India within the next 24 months, GM would also launch a bunch of LCV products, which the automaker and SAIC had developed for the Chinese market. GM India has its Halol plant in Gujarat for producing small trucks while the passenger cars will be produced at the company’s Talegaon plant near Pune. Besides, there’s also a diesel and LPG variant of the Beat that’s due for launch early 2011.

With the Indian auto industry witnessing a robust demand for small cars, automakers are scrambling to roll out their cars as early as possible. Toyota is entering the mass-market segment with the Etios hatchback and sedan launching in December. Hyundai is readying an 800 cc small car for launch next year. Tata is mulling yet another small car to fill the gap between the Nano and the Indica in its portfolio. Honda is readying a small car, tentatively named Brio, for 2011. Fiat has a small car project planned exclusively for the Indian market. Volkswagen is ready to foray into the small car segment with some help from Suzuki. Speculations suggest even Mitsubishi India is not too far from a decision regarding a small car for India.

In the next two years, Ford will bring in eight new models to India while the Renault-Nissan combine will roll out nine models, which may or may not include small cars. The big question is who among them will launch the first mass-market electric small car? GM’s plans of developing the “Spark EV” along with REVA died a premature death after Mahindra took a controlling stake in REVA. GM now plans to pursue its own electric-vehicle program though it remains to be seen whether it will take off anytime soon.