By on September 4, 2012

When you want to make and sell cars in India, you don’t need a joint venture partner. Except when you are GM. In the dark days of December 2009, GM cut a deal with Chinese partner SAIC, gave them half of its India business and a golden share in China for much needed cash. SAIC underwrote a $400 million loan when GM was out of money. Now, India is flooded with Chinese cars bearing the Chevrolet badge.

GM began initial production of the Chevrolet Sail, its “first ever Chinese-designed car for the Indian market,” writes Reuters. Officially, the small Sail was designed by GM’s PATAC tech center in Shanghai. Reuters says that car was “designed by GM’s Chinese partner SAIC” instead., and it claims Lowell Paddock, President of GM India as the source. He is full of praise for its Chinese partner:

“”What SAIC brings to us is more of a regional focus and more of an emerging market focus. Sail is in some ways perhaps the first vehicle designed with primarily Asian customer requirements.”

Another Chinese design will follow shortly. The Chevrolet MPV Concept is a rebadged GM-Wuling Hong Guang microvan.

According to Reuters “GM needs a shot in the arm” in India. GM’s India sales fell 11 percent in the first six months of 2012, while the market rose 10 percent.

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9 Comments on “GM Brings Chinese Cars To India...”

  • avatar

    SAIC underwrote a $400 million loan when GM was out of money

    well if GM can cough out the dole back then she can fly solo in India again.

    But life isn’t all that simple I guess.

    Atleast is better than walking up to the altar with Tony FIAT last time, costed her 4 bil?

    • 0 avatar

      I don’t believe the sale included an option to repurchase. SAIC viewed the GM India deal as a chance to further expand their operations beyond the Chinese market, and see India as a major part of their growth strategy – they’re unlikely to ever consider selling that 50% back to GM for a anything approaching a reasonable sum.

  • avatar

    Eventually, “Government Motors” will refer to the Chinese government, not the American one…

  • avatar
    Freddy M

    I don’t suppose GM would consider exporting the Sail to the North American market would they? It resembles a baby Cruze which isn’t really bad. And since GM insists on entering every segment, I think it would have been a far more attractive proposition than the hideous Spark they have over here.

    • 0 avatar

      They don`t go into every segment quite as much as Nissan who I think is in EVERY segment – small truck, large truck, minivan (no GM), full range of cars, plus niche cars like Cube and Juke.

  • avatar

    Well I suppose this meant the taxpayer didn`t have to provide $400 million extra.

    The Indian market is the size of the UK market, so important but not exactly make or break. Yes the Indian market will grow in the next few decades (it took China 30 years to get to their current point), but both VW and Toyota have shown that you can be profitable and large without having a major presence in every market.

    Talking of poor commercial moves I am wondering why Toyota continues to work with South East Toyota (SET) distributors. This is a company that was formed in the 60’s to help the fledgling Toyota US business. It distributes all Toyota cars in five US states (NC, SC, AL, GA and FL) and by reports distributes around 20% of Toyota’s US market (a bigger market than India!). When I went on Edmunds to look at the new Camry I saw extra charges of $840 for buying in NC as opposed to a non SET area (like Ohio).
    Example below :

    Camry SE in Ohio (43068) has $21889 invoice and $23980 MSRP
    Camry SE in NC (27278) has $22666 invoice and $24060 MSRP

    Interestingly the true market price was similar, so it looks like primarily dealers lose out on the extra money. But I would have thought Toyota also loses the potential of extra profit too.

    From the Wikipedia page it has a revenue of over $11 billion. I can understand Toyota needing the help in 1966 but surely since the early 90’s Toyota could have handled all of this themselves and reaped the extra revenue and profit for themselves. I would have thought the contract they have with SET would allow them to take back the operations. Maybe their is some good reason for the continuation of this contract. Maybe TTAC with their friendly relationship (as evidenced by the LFA series) with Toyota could look into this since on the surface it seems baffling to continue the deal.

  • avatar
    Jean-Pierre Sarti

    Bertel, If GM really wanted to get into the Indian market why don’t they just buy or buy into Suzuki? I don’t know much about the business side of things but I know Suzuki has decades of history in India.

    Starting about 5 years ago I have personally seen a strong anti-Chinese products sentiment in my family and friends in India.

  • avatar

    A Chevrolet with Chinese quality and engineering built in! That cannot possibly go wrong. I can see generations of Indians turned off from buying a GM product. No big loss, the ones around here only buy Honda and Toyota products anyways. They would not be caught dead driving a Chevrolet.

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