COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

General Motors seeks to penetrate small cities with Corsa

General Motors Corporation of the United States does not intend to immediately address the export market with its next offering for the Indian roads -- the Corsa.

The foray into the export markets with the Corsa would commence only after meeting the requirements of the domestic market in India, said P Balendran, vice-president (corporate affairs), General Motors India, a wholly owned subsidiary of the US car-maker.

''We are concentrating on introducing the product in the Indian market first. Details (of the export plan) would be finalised only in due course of time,'' Balendran said.

The Corsa, which is likely to sport a 1300cc engine, is slated to hit the Indian roads by the last quarter of 1999. The car would be launched with a 50 per cent local content level.

GMI was floated as a 50-50 venture between General Motors, US, and the CK Birla group. But recently, General Motors had purchased the entire stakeholding of the Birla group. The decision to this effect was taken after the Birla group decided to freeze further investments in the venture and declined to contribute to the Corsa project.

In February, the Foreign Investment Promotion Board had approved the buy-out plan of General Motors for Rs 650 million. It also allowed GM to bring in an additional capital of $ 20 million for introducing a new car model. The board, however, rejected General Motors' application seeking royalty from General Motors India.

The company is presently producing the mid-size sedan Opel Astra from its Halol plant near Baroda in Gujarat.

Meanwhile, company sources pointed out that GMI is chalking out a strategy to foray into the semi-urban cities and small towns with the Corsa.

The new strategy is aimed at improving its presence in every nook and corner of the country. ''Our present vehicle, the Opel Astra, is more of an urban and big city car. So, we will be using the Corsa to see that the company's rate of penetration is increased in the smaller towns.''

The markets are being categorised according to the population and average income. The idea is to initiate more competition in these areas where the disposable income generally comes from agricultural or business activity, the officials said. The Corsa would be positioned as the prime revenue spinning model for these markets.

''Today, we do not expect the disposable incomes in these towns to be so high to purchase an Astra but the Corsa would be the vehicle for them.''

The company had recently launched a new look version of the Opel Astra -- Astra Club -- and announced that a sports model of the same would be rolled out by the third quarter of 1999.

Besides, another new model -- Opel 100 collection -- would be rolled out by the third quarter of this year.

While the Astra Club sports a petrol heart, the power-train for Opel 100 collection has not been decided as yet. ''We are still working on the model. The prices and the engine dimensions and variations are yet to decided. But it is for sure that the next model would be special edition version.'' The Astra Club has been planned as a regular model.

Business news