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GM-SAIC JV may launch $3,500 small car in India

By George Gao  From Gasgoo.comDecember 14, 2009

Shanghai, December 14 ( China's auto giant SAIC Motor and its U.S. partner General Motors have recently set up a Hong Kong-based joint venture to focus on India and other Asian markets. The 50:50 new venture, General Motors SAIC Investment Ltd (GMSIL), may launch an entry-level low-cost car for the Indian market, said India's leading auto news source Wheels Unplugged.

The A1 segment car could be positioned below Spark and cost between US$3,500-4,000, and may also target similar markets like India, including Latin America, Eastern Europe, Africa and even possibly China. Though GM India has no immediate plans for its entry-level low-cost car, the small car may be rolled out from its Talegaon unit.

"The formation of this joint venture which we expect to be finalized in the next three months will help GM India take SAIC's expertise in manufacturing cost-effective small cars and vans and use it to develop suitable products for the domestic market. The first offering from this partnership will be one-ton passenger mini vans," said GM India Vice-President P. Balendran.

The new deal with GM makes SAIC the first Chinese automaker to enter India, the world's second fastest-growing auto market, which remains dominated by small, affordable cars. SAIC-GM-Wuling's vans may be well accepted in India more quickly than Shanghai GM's sedan models, analysts said.

SAIC and GM has formulated a joint strategy for investment in India. They will use GM's two local manufacturing facilities (at Talegaon near Pune and Halol near Baroda) and a powertrain facility, and GM India's nationwide distribution network.

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