India to be new international manufacturing hub for General Motors

General
Motors is looking to boost its weak Indian sales and will establish a global
manufacturing and export hub there.

Reuters reports that the US car maker is aiming to increase its market share to five
per cent in the country by 2025.

It sold
57,600 cars in India last year, and plans to increase this to 400,000 within
the decade.

Stefan
Jacoby, the company’s chief of international operations said the Indian market
was becoming increasingly confident.

“We’re
pretty optimistic,” he told Reuters.

“We see
growth potential in India, and believe there’s a good opportunity for the
Chevrolet brand to take share in this market.”

The
country’s car sales have been steady at around 3 million annually in recent years, but Jacoby
is predicting this to change due to an increase in affluence and economic
confidence, especially following PM Narendra Modi’s election last year.

GM runs at
a loss in India, despite having a presence in the market for 18 years. Its
vehicle sales last month fell to 3,612, down 32 per cent compared to April last year, reported Times of India last week.

India’s
local auto production has been strengthening and rival car company Ford predicts it to reach 7 million cars by 2020.

Car making
is worth about 22 per cent of the total manufacturing sector in the country.

Jacoby
would not comment on analyst predictions that GM was seeking to establish an
international manufacturing hub in India at the expense of South Korea – which has
seen wages rapidly rise over the last five years – but said the company would “drive efficiencies
over time.”

Meanwhile,
it is being reported that Volvo is considering establishing setting up car assembly
operations in India, which it has imported luxury cars to since 2007.

Press Trust of India cites an unnamed industrial source saying a decision could be
made by the end of the year.

Image: REUTERS/AMIT DAVE/FILES