General Motors Co. (GM) is planning to make a compact car for around $4,000 in Asia in order to target the emerging ultra-low-cost car market.  

As there is a great fall in the car sales in North America and Western Europe, the manufacturers are attracted to keep up the sales in the developing markets.

Nick Reilly, GM's newly installed executive vice president, international operations said that, “When Tata Motors in India came out with their $2,500 Nano vehicle; it put a lot of auto makers on the spot”. 

Tata Nano just similar to this started shipping in July to its domestic customers with a base price of just under $3,000, and executives have talked of selling versions of the car in the U.S., Europe and emerging markets over the next two or three years. 

Reilly at a media said briefing late Friday in Brazil, GM's third-largest market by sales after China and the U.S, “We are not going to make cars that cheap because that is really a specific car for a very specific market that has different emissions standards and specifications than markets like the U.S. and Brazil”. 

"So we are looking at lower cost vehicles, but do not know yet where it will be made or where will it be sold, though most likely in Asia." 

GM is already in plans of exporting its micro minivans that it makes with Chinese partners and expanding its product range. SAIC GM Wuling Automobile Co. will likely sell "significant numbers" of vehicles outside of China, though not under the Wuling brand because GM does not own the branding rights, says Reilly. 

During the first half of the year, more than two-thirds of GM sales were outside North America. Reilly, former head of its Asian business, was chosen last month by Chief Executive Fritz Henderson to oversee all international business from headquarters in Shanghai, in part because of his track record in developing alliances. 

Reilly said that, “we are getting used to partnerships and the industry as a whole will see more partnerships forming in 2009”. He added that GM was not currently looking for partners in other large markets, like India. 

Throughout the Asia GM is already having Joint ventures and is close to choosing a partner to acquire a majority stake in its Opel/Vauxhall business. 

Latin America sells more cars than the Germany and the U.K. - its two largest European markets - and its penetration in Brazil trails only that in the U.S and so it’s the hotspot. 

Reilly said that, “Fiat wanted a part of Chevrolet in Latin America, but we were never interested”. "Luckily, [that] was not the only deal on the table; otherwise we would have had no choice but to seriously consider it."

Best Selling General Motors (Chevrolet) Cars:
Chevrolet Aveo (Sedan)
Chevrolet Optra (Sedan)
Chevrolet Tavera (SUV)
Chevrolet Captiva (SUV)
Chevrolet Spark (Hatchback)
Chevrolet UVA (Hatchback)
Chevrolet SRV (Hatchback)

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Posted by Naresh Koshti on 20 August, 2009 11:20:40 AM IST #