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General Motors India, a subsidiary of General Motors Corporation on Wednesday announced a top-up of $500-million investment to the $1 billion it has already committed to invest here.

The company’s timing is significant as it comes a day after Tata Motors suspended work on its Nano car project in Singur over land woes. GM India’s new investment plans conform to automaker’s optimism about investments in India, disregarding the current industrial slowdown.

The additional investment, spread over seven years up to 2015, will go into capacity expansion at Halol, setting up a new plant in Talegaon, including a powertrain unit.

“The company will invest half a billion dollar in India over next seven years to keep the growth momentum. A good part of this will go into the development of new models, including a small car next year, and upgrading the existing ones that will result in a new Optra in 2010,” said Karl Slym, president and managing director, General Motors India, at the launch of its utility vehicle, Tavera Neo 2. Maruti Suzuki India (MSIL), Hyundai Motor India (HMIL) and Ford India have also announced their plans for more investment.

At the recent annual general meeting of MSIL, Suzuki chief Osamu Suzuki had asked Maruti to increase its focus on R&D for small engines in India as the demand for such cars would surge in the near future. Suzuki Motor Corporation of Japan is seeking around 90% research & development on smaller engines here against 30% being done by MSIL. Suzuki is developing India as a base for small cars. Petrol engines below 1,200cc and diesel engines up to 1400cc have now got excise benefit from the government at 12% duty.

Suzuki has earmarked an investment of Rs 9,000 crore in India, a good part of which has gone into setting up a powertrain unit that will make Suzuki’s K-Series or the next generation engines that would eventually be used in all global models. HMIL has invested Rs 1,210 crore in its second engine & transmission plant. This is part of Hyundai’s over Rs 4,000-crore investments in the country until 2013.

“Investment of such huge scales is on a long-term basis and is done taking into consideration the fluctuations that would happen in the future. Though the domestic market is sluggish at the moment there is a huge potential for small cars in India and there could be exponential growth in the next
http://www.financialexpress.com/news/GM-buys-India-dream-to-spend-500m-more/357124/
 

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ahh yes... further development outside of the home market. Is GM hell bent on completely letting their NA offerings fall apart? GM should have put that that money to better use on its home turf.

Disappointing news indeed.
 

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...GM should have put that that money to better use on its home turf.

Disappointing news indeed.
No. One of the fundamental maxims of capital budgeting & risk assessment is to invest in projects with higher net present value. As indicated in the article, GM isn't the only one to conclude the India domestic market presents such an opportunity- HMC, Maruti-Suzuki, and Ford are also making significant investments there.
 

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No matter how much GM invests in our country, unless the marketing morons and poor dealer attitude towards the customers are withdrawn, GM cannot be successful. Look at Suzuki, even though some of its products sold here are 2 decades old, still they are selling in huge numbers because they have the right products at the right place at the right time at the right price point.

GM actually entered India with 1996 opel astra, a commercial disaster with maintenance costs burning a big hole in the pocket.
in 2000, came in the latin american corsa, another commercial disaster due to its prehistoric styling, interiors, poor gas mileage and high ownership costs kept customers away.
2003. The last opel-vectra, launched as a direct import from germany. it was priced lower than camry, accord and mondeo. highly successful in first 3-months but again, poor after sales attitude and shortage of spares meant this was a commercial disaster.Model withdrawn in 2005.

2003, March-GM launches is so-called "mass value brand"-chevrolet.
first launch-Chevy branded subaru forester.would anyone believe it that within its 2 years of existence less than 400 units were sold:(.
model withdrawn in 2005, again

2003, july-chevrolet optra launched with much fanfare with 1.8 litre engine.first GM product that was actually successful in long term despite this car having disastrous resale value.

2006-launch of aveo twins-another flops as compared to competing products in our country.
GM's last hope-the Spark, one of the most eagerly awaited cars in india expected to crush the competition with huge demand.
april 2007-chevy launches the spark but again the marketing honchos overprice it by about Rs.40,000 more as compared to competing products.

october 2007-hyundai launches I 10, eventually becomes the bestselling compact in India. Spark is nowhere in the buyers radar, leading GM to brutal price cuts of about Rs. 60,000 thus helping to move out more units.

only feather in GM's cap-captiva which is currently the country's bestselling import luxury CUV. for how longer will it able to sustain sales will be seen.

another product-chevrolet tavera(rebadged 1990s isuzu panther, is just selling because 80% of its sales go to taxi cab markets.

now they have opened a new plant which will manufacture cruze, spark and beat from 2009 onwards.

dealer network will have to be spruced up and we need better quality products, not overpriced daewoos, if GM has to be successful.
 

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Why is GM spending a billion dollars in India and asking the US government for guarenteed loans? Any loans supplied to GM should have string attached that require increased investment in US manufacturing.
 

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This isn't an either-or situation. GM has to be competitive in all markets. They're working hard in the US already. They have to keep improving their vehicles and facilities in markets like India and China because that's where the big growth will be in the future.
 

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No. One of the fundamental maxims of capital budgeting & risk assessment is to invest in projects with higher net present value. As indicated in the article, GM isn't the only one to conclude the India domestic market presents such an opportunity- HMC, Maruti-Suzuki, and Ford are also making significant investments there.

so we'll further the development of China and India and let our own markets fall apart.. sounds like a win-win to me - NOT

Step right up and see the USA ... former superpower turned third world country. All because we can no longer produce anything for ourselves and have exported all of our jobs overseas.

Watch the amazing transformation right before your eyes :rolleyes:
 

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No matter how much GM invests in our country, unless the marketing morons and poor dealer attitude towards the customers are withdrawn, GM cannot be successful. Look at Suzuki, even though some of its products sold here are 2 decades old, still they are selling in huge numbers because they have the right products at the right place at the right time at the right price point.

GM actually entered India with 1996 opel astra, a commercial disaster with maintenance costs burning a big hole in the pocket.
in 2000, came in the latin american corsa, another commercial disaster due to its prehistoric styling, interiors, poor gas mileage and high ownership costs kept customers away.
2003. The last opel-vectra, launched as a direct import from germany. it was priced lower than camry, accord and mondeo. highly successful in first 3-months but again, poor after sales attitude and shortage of spares meant this was a commercial disaster.Model withdrawn in 2005.

2003, March-GM launches is so-called "mass value brand"-chevrolet.
first launch-Chevy branded subaru forester.would anyone believe it that within its 2 years of existence less than 400 units were sold:(.
model withdrawn in 2005, again

2003, july-chevrolet optra launched with much fanfare with 1.8 litre engine.first GM product that was actually successful in long term despite this car having disastrous resale value.

2006-launch of aveo twins-another flops as compared to competing products in our country.
GM's last hope-the Spark, one of the most eagerly awaited cars in india expected to crush the competition with huge demand.
april 2007-chevy launches the spark but again the marketing honchos overprice it by about Rs.40,000 more as compared to competing products.

october 2007-hyundai launches I 10, eventually becomes the bestselling compact in India. Spark is nowhere in the buyers radar, leading GM to brutal price cuts of about Rs. 60,000 thus helping to move out more units.

only feather in GM's cap-captiva which is currently the country's bestselling import luxury CUV. for how longer will it able to sustain sales will be seen.

another product-chevrolet tavera(rebadged 1990s isuzu panther, is just selling because 80% of its sales go to taxi cab markets.

now they have opened a new plant which will manufacture cruze, spark and beat from 2009 onwards.

dealer network will have to be spruced up and we need better quality products, not overpriced daewoos, if GM has to be successful.
It's my understanding that GM are also doing poorly in India because they offer no Diesels.
 

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Part II to this story is that GM will likely make "world cars" in India (or components) at slave labor wages and export them to the US...

Or they will use India's vast technical/academic base to do all types of work there that would be more expensive here.

I'm all for tapping India's growing/energing auto market. But who's gonna watch the store and make sure GM's not using India (or China) to backdoor workforce reductions here?

And all the while they will be whining '"it's necessary to avoid more losses and red ink"...
 

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Part II to this story is that GM will likely make "world cars" in India (or components) at slave labor wages and export them to the US...

Or they will use India's vast technical/academic base to do all types of work there that would be more expensive here.

I'm all for tapping India's growing/energing auto market. But who's gonna watch the store and make sure GM's not using India (or China) to backdoor workforce reductions here?
And all the while they will be whining '"it's necessary to avoid more losses and red ink"...
thank you sixspeed... someone around here actually gets what investing in these "markets" could eventually do to the home market.
 
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