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General Motors will take on Suzuki in India with cars from China

Shanghia - In an effort to crack the Indian auto market, General Motors is enlisting its partner in China, SAIC Motor Corp.

GM and Shanghai-based SAIC will start selling models in India next year that are similar to those now sold in China, Kevin Wale, GM's China president, said in an interview. The alliance will challenge Maruti Suzuki India, the nation's largest carmaker with a 41 percent market share, and Tata Motors, maker of the world's cheapest car, the Nano.

The alliance produces the best-selling vehicle in the world's biggest car market, where it has a 13 percent market share. GM has struggled in India since entering in 1994, with its Chevrolet models accounting for only about 5 percent of car sales in Asia's second-fastest growing major economy.

"The Indian market is very similar to the Chinese market," Wale, who is based in Shanghai, said last month. "They also have a need for a lot of products that have already or are being developed for the Chinese market."

The partners may introduce as many as three light commercial vehicles and two passenger cars in India by 2012. The alliance also is targeting other developing markets. Last month, it started exporting Chevrolet Sail compacts made in Shandong, China, to Chile and Peru. The carmakers may ship elsewhere in Latin America, Egypt and the Middle East, Wale said.

GM and SAIC said in December they would spend $650 million forming a new venture to build and sell passenger cars and small trucks in India. The automakers have not identified the first vehicles to go on sale next year.

The two companies plan to use their expertise in China to gain a competitive advantage in India, said Judy Zhu, a Shanghai-based spokeswoman for SAIC.

Domestic passenger-vehicle sales in India rose 38 percent in October from a year earlier to 231,957 units, the Society of Indian Automobile Manufacturers said Wednesday in New Delhi. Deliveries in China rose 27 percent to about 1.2 million units in the same period.

India's passenger-car sales were 1.95 million in the year ended March 31. The government estimates sales may pass 3 million by 2015. During the past five years, India's economy grew by an average 8.5 percent annually, and per capita incomes gained 70 percent.

"Our focus is on India," said Wale, 56. "The ability to take the product portfolios and the understanding of the growth- market business model gives us the opportunity to grow much faster than if we did it by ourselves."

GM-SAIC will make cars and trucks weighing less than 1 ton at GM's Halol and Talegaon plants.

- Bloomberg News

, which have a combined annual capacity of 225,000 units, said Hua Foley, GM's Shanghai-based spokesman.

GM and its partners have 13 percent market share in China this year, chief financial officer Chris Liddell said Nov. 4. This is up from 3 percent in 2000, he said in a presentation for investors.


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