General Motors has finalized its decision to go ahead with the JV for Indian market and the Chinese SAIC Motor Corp is too willing. The move is for small car projects and will be the next step, after their business in China, for manufacturing minivans and minitrucks for the domestic markets, which is dominated by Tata Motors.
GM is making good show in India with the growth of 65% in November against the last year’s sale by 7118 units. The pact will be a boost for SAIC, which is seeking a foothold in the Indian market and will be an increase for GM’s portfolio. SAIC has since withdrawn its trading of shares in Shanghai for the sake of major asset restructuring and a board meeting on December 9.
The step is viewed as a move by SAIC to stake 50:50 claim with GM (GM has gained a lot in Chinese market this year) which is under the clouds. GM’s sale in China is 1.6million, of course with the JVs, which is an increase of 64% against the previous year and the sale in November alone increased to 109% against the sale in the last year same period.
GM-SAIC pact is a prolonged one, since the latter had a little hesitation for market expansion. SAIC had been facing a good niche in Korean market, which has come to a grinding halt. Now the Indian car market has come to the rescue with the domestic growth of 7.9% in three months upto September. Tata’s September sale grew to 81% in commercial vehicles and 48% in domestic cars. Indian auto market proves to be a gaining fold for car makers, especially small cars and the maker are now in a mood to release low priced cars and trucks. The SAIC pact is yet to be confirmed by GM.