GM India Looks to Recapture Success With Chinese Partner SAIC

General Motors hopes its fortunes in India will rebound with the help of Shanghai Automotive. The partners now have an equal stake in General Motors India. GMI car and light-truck sales surged 59.8% to 110,361 units in the year 2010, compared with the prior year. During this year’s first half, sales fell 8.2 % to 55,117.

Diesel-powered Beat is due out soon.

SAIC obtained its stake in loss-making GMI last December for $500 million. The JV is investing that amount to raise the Indian plant’s capacity to 405,000 units annually and its engine capacity to 300,000 over the next three years.

The JV is reflected in its management structure. Each auto maker has three board members, including Karl Slym, president and managing director representing GM India, and a joint managing director from SAIC.

GMI is abandoning its cars-only profile, with SAIC now sending low-cost, inexpensively engineered light trucks to India. The aim is to keep GMI competitive in its home market.

“We will capture 10% market share (up from the current 4%) by 2012-13, by trebling sales to over 300,000,” Slym says.

GMI is converting its Halol plant for light-truck production and plans to make all its cars at its Talegaon facility.

Six new vehicle launches are planned over the next two to three years to reach Slym’s stated market-share goal.

GMI’s bid to close gaps in the Indian market is under way. A minivan and light truck reportedly will be sourced from SAIC and positioned against the Maruti Eeco van, while another light truck will challenge the Tata Venture.

A diesel version of the popular Chevrolet Beat compact was launched on the market this week. Sourced from its engine-making partner Fiat, the conventional 1.2L 4-cyl. engine is converted to a 0.9L 3-cyl. generating 58 hp and 110 lb.-ft. (150 Nm) torque.

GM has 10 JVs with SAIC in China, including commercial vehicles, including a Wuling truck that will be brought to India to challenge the Tata Ace and Mahindra Maxximo.

Facing a large balance-of-payments deficit with India, the Chinese government is pressuring auto makers to export vehicle kits to the country for local assembly. SAIC thus is boosting exports to India via its General Motors lifeline.