General Motors (GM) hopes to use its Indian operations as an export hub for market like Australia and South America in a bid to utilise capacity when domestic sales are slow. GM India, which started exports this month with Chile, is the oldest global carmaker to start local assembly – in 1928, and currently operates two plants in Maharashtra and Gujarat with a combined annual installed capacity of 2.80 lakh units.
Stefan Jacoby, GM executive VP and president, GM International said on Thursday, ?Australia is one of the options for exports from India, we are investigating this. We cant go into details.?
Last year, GM announced that it would halt production in Australia, where it sells the Holden brand, by 2017 due to high costs and strong currency. Ford has already announced the same, and the only other manufacturer Toyota is expected to soon follow. With a market size of over one million units a year, this is seen as a big opportunity for Indian car exports.
Arvind Saxena, president and MD of GM India said, ?We are just starting exports and yesterday we had the first roll out for Chile. The next two markets we have identified are Mexico and Columbia for parts exports. This is an opportunity to show that we are able to make high quality cars which are acceptable in other markets?.
Gaurav Vangaal, analyst for light vehicle forecasting at IHS Automotive said, “GM has the capability and capacity to explore export markets like Australia & Latin America from its two existing plants. Other car manufacturers like Toyota, Maruti Suzuki and Hyundai are already doing the same and meeting global quality standards comfortably. Any progressive decision on this will give boost to Made in India strategy of our visionary Prime Minister.”
For GM India, exports make strong sense as it currently utilises about 20% of its installed capacity. GM’s domestic volumes fell 8% to 80,890 units in FY14 and remain down by 33% in April-August FY15 at 24,284 units.