Future Watch: General Motors to team up with SAIC to build low cost small cars for India
A month ago, General Motors India launched the Sail U-VA hatchback, a car that has been developed by SAIC, GM’s Chinese partner. SAIC has been selling the Sail hatchback and sedan in China, as low cost cars, with both models enjoying terrific success at the hustings. In the next few months, GM India will launch two more cars developed by SAIC in the form of the Sail sedan and the Enjoy MPV. In the coming years, General Motors plans to tap into SAIC’s expertise of making low cost cars for emerging markets and launch a slew of small cars in markets across South East Asia and this includes the Indian car market as well.
This move from General Motors comes at a time when car makers across the globe are looking at setting up low cost car brands or even launching low cost cars under existing brands. These low cost cars are mainly aimed at emerging car markets of the world. For instance, Nissan has resurrected the Datsun car brand. Datsun will serve as Nissan’s small car brand for the Indian car market and many other emerging markets like Russia, Indonesia and beyond. Similarly, Renault is coming up with a range of low cost small cars specifically targeting the Indian car market.
Yesterday, Fiat announced a brand new entry level small car for the Indian car market. The car from Fiat will compete with the likes of the Maruti Alto and the upcoming Datsun range. So, the entry level car segment in India is indeed hotting up with a slew of launches from various car makers. The current market leader in the entry level small car space is Maruti Suzuki, whose latest launch, the Alto 800, is clocking sales of over 20,000 units each month. The nearest competitor of the Alto 800, the Hyundai Eon sells less than half of the Alto’s numbers.
Though Tata Motors has launched the least priced car in the world, the Nano, in India, the car is a slow seller as the Indian car buyer is looking for more than just a basic means of transport in the small car space. In fact, even low cost small cars are aspirational symbols for that population of buyers seeking to graduate from two wheelers to four wheels. So, even low cost small cars need to come with a car like appeal and that is something that global car makers mulling an entry into the Indian small car space should take note of.