GM India to Outsource New Diesels Engines for Tavera

MUMBAI – Following the successful July launch of its diesel-powered Chevy Beat compact car with an engine sourced from Fiat, General Motors India’s latest deal with a domestic supplier to provide diesel mills for the Chevy Tavera multi-utility vehicle launches this month.

Under the agreement, the Sonalika Group will provide the auto maker with a Bharat Stage IV emissions-compliant diesel engine for the Tavera, which the auto maker is hoping will boost sales of the MUV.

Tavera MUV sales suspended last year.

The monthly order for 500 of the common-rail direct-fuel-injection 2.0L diesel mills will rise to 2,000 units by next April, the auto maker says. Orders are likely to increase again once its Chinese partner, SAIC Motor, bring its light-commercial vehicles here next year.

Deepak Mittal, managing director of International Cars and Motors, the Sonalika subsidiary that will build the Tavera diesels, says the new engines use technology from AVL Powertrain Engineering.

GM India suspended sales of the Tavera more than a year ago, when India upgraded its emissions standard to BS IV, the equivalent of Euro 4, in 13 metropolitan cities. The Hindustan Avtec 1.2L and 1.3L diesel engines the auto maker was using could not meet the stricter requirement.

Sonalika already was making the CRDi engine for its Rhino utility vehicle. Its location in the tax-free zone of Himachal Pradesh means it is less costly to build the engines there compared with its Indian competitors.

GM India’s initial order is worth Rs100 million ($2.2 million), says Managing Director Karl Slym. “The deal benefits both the parties, and we are happy to use the Sonalika engines.”

He also says the auto maker is aiming to double its overall sales in the next two years.

“If the industry is growing 12%-15%, our sales will grow at 24%,” Slym says, noting the company already has a good start. GM India deliveries in July surged 46.6% to 9,465, according to Ward’s data. Sales in the first seven months reached 51,801.

The auto maker’s strong performance last month ran counter to the industry’s combined car and utility-vehicle sales that slid 4.9% in July, including exports, compared with year-ago, the Society of Indian Automobile Manufacturers data shows.

Slym predicts once the Tavera reenters the market and the SAIC LCVs arrive, GM India should see sales grow to more than 300,000 vehicles annually.