— Photo: Vivek Bendre

BREAKING NEW GROUND: David N. Reilly, General Motors Group Vice President (left), with Rajeev Chaba, President, GM India, at the proposed site of GM's new plant at Talegaon near Pune on Tuesday.

TALEGAON: The U.S. automobile giant, General Motors (GM), may consider investing in a powertrain (engines and gearbox-making) facility in India and the investment for this can be in the region of $300-400 million.

Speaking at the ground-breaking ceremony of GM India's second facility in India here on Tuesday, David N. Reilly, President, GM (Asia Pacific), said a decision would be taken in the next six months but the powertrain facility would not necessarily be located here.

"The amount we invest will depend on the vertical integration in powertrain and it will not be less than $300-400 million, including manufacturing and assembly,'' Mr. Reilly said. GM is looking at a powertrain, encompassing a range from 1.2 to 2 litres engines. "To be competitive, we have to have a substantial local content. In terms of overall numbers, 70 per cent will be localised without powertrain and 90 per cent can be localised with a powertrain.''

Production capacity

Mr. Reilly, along with the Chief Minister of Maharashtra, Vilasrao Deshmukh, laid the foundation for the company's second Indian facility after the one at Halol in Gujarat.

The Talegaon facility will have an initial production capacity of 1.40 lakh vehicles and GM is investing $300 million, taking its total investment in India to $750 million. The unit will make the Chevrolet mini-car, Spark, initially from the last quarter of 2008 and will employ more than 1,000 people at the outset.

The Halol facility makes the Chevrolet range of Tavera, Optra, SRV and Aveo.

In 2005, GM sold 30,837 cars and is targeting 50,000 cars in 2006. The Halol facility's capacity is being expanded from 60,000 units to 85,000 units annually at a cost of Rs. 100 crore, taking the total investment in Halol to Rs. 1,400 crore.

"We have now a 2.3 per cent market share and have been hampered by a lack of presence in the mini segment. By 2008, the two plants will have annual capacity of 220,000 units and we are looking to increase our share several fold to about 10 per cent by 2010,'' the GM Asia Pacific chief said.

Realising the importance of a diesel version in the Indian market, GM would start making the Chevrolet Optra diesel in the second quarter next year. The Tavera diesel was already doing well but in the small and mini segment. Mr. Reilly felt that there was a great opportunity and GM would later consider diesel versions for them also.

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