GM Submits Offer on Daewoo India Car Plant Assets

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Seeing India as a ripe market, General Motors has put in an offer to purchase the assembly assets of Daewoo Motors India Ltd. GM will build a mini-car in the new plant that is smaller than the current South Korean built Chevrolet Aveo subcompact (shown). (Photo: Alexandra Straub, American Auto Press)

The Daewoo India plant currently has an annual production of 85,000 vehicles. GM has plans to retool it for mini-car production. Shown is the Epica, Chevrolets midsize entry from GMs South Korean GMDAT division not currently available in the U.S. (Photo: Rob Rothwell, American Auto Press)

"This facility will allow us to produce a new generation of cost-competitive vehicles," stated Frederick A. Henderson, GM Group Vice President and President of GM Asia Pacific. The Chevy Optra pictured, which is not currently available in the U.S., is built in the GMDAT factory in Korea. (Photo: Alexandra Straub, American Auto Press)

Although offering extremely well made interiors, the current crop of ex-Daewoo cars built in GMDATs Korean facility have questionable overall dependability. (Photo: Alexandra Straub, American Auto Press)

Move to Take-Over Shuttered Assembly Facility Should Strengthen GM India

While China has been all the rage for automaker expansion over the last couple of years, continuing development of the continually expanding Indian market has been almost a non-issue, despite its near billion person population and middle class that surpasses the United States in size.

Granted, India already has a relatively strong automotive sector, but there is definitely room for growth (a major understatement) and not all automakers are present in the market. GM already has invested in India however, under its GM India division that encompasses retail outlets, a manufacturing plant at Halol in the state of Gujarat and a new GM Engineering Center in Bangalore.

Seeing that opportunity is still ripe, General Motors Corporation has submitted an offer to purchase the assembly assets of Daewoo Motors India Ltd. (DMIL), a similar move it made recently in South Korea.

As recently reported the offer has been accepted by the principal creditors of Surajpur-based DMIL (ICICI Bank, IDBI and Exim Bank), but is still subject to the approval of the GMs respective boards, the affected creditors, as well as judicial and governmental authorities. The deal would see GM owning 100 percent of DMILs vehicle assembly assets.

He DMIL plants capacity allows for annual production of 85,000 new vehicles, and according to sources will be retooled to produce a mini-car for the Indian market, expected to arrive within a years time. No doubt this car will be saleable in other markets, while plant expansion would allow other models to be built alongside the mini-car.

The facility allows GM a base to expand its Chevrolet nameplate, part of its plan to expand the brand throughout much of the world.

“We are pleased and excited about the opportunity to grow our business and presence in India,” comment Frederick A. Henderson, GM Group Vice President and President of GM Asia Pacific. “This facility will allow us to produce a new generation of cost-competitive vehicles that can be marketed through our Chevrolet distribution channel.”

If youve been to your Chevrolet retailer recently you may have noticed a new car, the subcompact Aveo. A midsize Epica and compact Optra join the Aveo in Canada. These models, that continue to be sold as Daewoo branded cars everywhere but in North America, are also branded as Suzukis, and depending on market are dubbed the Verona, Forenza and Swift+ - the Swift+ is not available in the U.S.

The Korean made cars show a major improvement in perceived quality over traditional North American made GM cars, with extremely well made interiors featuring high-quality plastics - something the U.S. and Canadian made cars have yet to achieve. Still, Daewoos actual dependability is subject to scrutiny having fared poorly in J. D. Powers & Associates 2003 Vehicle Dependability Study (VDS), when the cars were still sold in North America under the Daewoo nameplate. The 2004 VDS is not yet available, so the new GMDAT built cars reliability is questionable. General Motors, for the most part, has an enviable reliability record according to J. D. Powers.