GM lines up major plans for India

Cash-strapped it may be, but General Motors Corp is said to have lined up big investment plans for India. The slowdown in the local market is not seen as a hindrance by the car major.

According to a senior official at the company’s India operations, the car maker feels that emerging markets would be real growth areas for the auto industry in the days to come.  As per the plans lined up, GM is building factories in India and Thailand to counter declining sales in the US.

The company has already pumped in close to $1 billion in India. It already owns two factories in t he country with a capacity to produce 225,000 vehicles every year. According to latest reports, the company will be spending more than $200 million to set up an engine plant.

GM also has lined up plans to raise the capacity of factories in India to 300,000 cars a year. It has revealed that GM’s activities are already funded and the plans are on track ahead.

A newswire report added that the company had apprehensions that it will fall short of its India sales target this year as higher loan rates and slower economic growth damp demand. The automaker now expects to sell as many as 78,000 vehicles in the country this year compared with a previous target of 90,000. Sales totaled 60,032 vehicles last year.

Though sales have been falling, GM is looking at doubling its market share in India to 10 percent by the end of 2010. The current share stands at 3.8 percent as on March 2008.

Significantly enough, GM sees its plans on a perfect track even as nationwide car sales have fallen in three of the past four month on higher interest rates.