General Motors to Invest US$200 Million in India

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Aug. 29 – Riding on India's automotive high, General Motors Corp said it would invest more than US$200 million in a plant for car engines in India.

The facility, which will be located in Talegaon in western Maharashtra state, will be GM's second vehicle plant in India and will have an annual capacity of 160,000 units that can be expanded to 300,000 units, Reuters reported. The plant will make petrol and diesel engines and is expected to be completed in the first quarter of 2010.

The automaker currently imports engines from South Korea and Australia for its Indian operations, and will be able to use the new factory to supply to its factories in the local market and overseas.

Constructing an engine plant will help GM price its vehicles more competitively in India to compete with Suzuki Motor Corp. and Hyundai Motor Co. in one of the world's fastest growing automobile markets, CNN said.

"We cannot remain a global industry leader without a strong presence in India," its India head Karl Slym said at a news conference to announce the signing of a memorandum of understanding with the state government.

"This will enable us to capture more opportunities in one of the fastest growing vehicle markets in the world," he added.

The Detroit auto maker has invested more than INR14 billion ($320 million) to construct the Talegaon car plant. It will have an initial capacity of 140,000 vehicles a year, which will expand GM India's annual capacity to 225,000 vehicles.

The engine and car manufacturing plant will employ more than 1,400 people, which will be increased in future, the statement said.

GM, which began its operations in India in 1996, currently makes six cars and sport-utility vehicles of the Chevrolet range, including the Spark minicar and the Optra sedan, at a 85,000-unit-a-year factory in the western state of Gujarat. It also imports and markets the Captiva SUV.