Disunited States stands to lose the energy-saving small car battle to
both.
============
"General Motors doing booming business in India"
By Emily Wax
Washington Post Foreign Service
Saturday, May 15, 2010; A10
TALEGAON, INDIA -- Sparks fly and robotic machines buzz and hum.
Assembly-line workers in coveralls, the sons of peanut and rice
farmers, seal windshields and weld doors. They're making zippy little
cars called Beat and Spark in the gleaming new General Motors plant
here -- and they're making boatloads of money.
The iconic American carmaker went bankrupt last year, but its Indian
operations have never been busier, evidence of India's booming
economic growth and the rising prosperity of middle classes that are
increasingly demanding first-world trappings in one of the fastest-
rising countries.
"The new generation wants to hold the steering wheel in their hands,"
said Prabhjot Singh, manager of a driving school who said young
Indians who used to go to him to learn how to drive scooters are now
flooding in to learn how to drive cars.
With rising household wealth, the growth of suburbs and highways and a
youthful population, India is the second-fastest-growing market for
car sales in the world after China. India's auto industry reported a
26.4 percent growth in sales in 2009-10, partly because a government
stimulus package lowered once sky-high interest rates and made
financing easier, according to a study by the Society of Indian
Automobile Manufacturers (SIAM).
The Indian government also cut manufacturing taxes in late 2008 and
early 2009 to protect domestic markets and attract overseas partners.
India's economy continued to grow at 8 percent, second only to
China's.
Car sales, almost exclusively for the booming domestic market, climbed
25 percent in the fiscal year that ended in March, to 1.53 million
from 1.22 million the previous year, SIAM said. Sales of trucks and
buses, an important measure of economic activity, increased 171
percent in the past year, according to the group.
"We are creating world records. Because, in India, there are really
still only 10 cars per 1,000 people, so the growth potential is so
high," said Sugato Sen, senior director at SIAM. "There's also a
change in mind-set. Even those classes that don't want to show off now
feel a car is a necessity. There are also so many models at each price
point that buyers are actually getting confused."
The GM plant on the outskirts of Pune, a two-hour drive from India's
commercial capital of Mumbai, is so busy that managers plan to add a
third shift to churn out cars around the clock. The plant, built in
2008, is one of two GM plants in India. Employment has risen from 720
workers a decade ago to 4,000, and in that period annual production of
cars has increased from a little more than 7,000 to more than 70,000.
Business has been so robust that managers of GM India, a wholly owned
subsidiary of GM, didn't want bankruptcy proceedings in the United
States to deter Indian customers, so they launched an aggressive
public relations campaign, offering free service at "camps" across the
country and inviting the Indian media to film it all.
"We didn't want the bankruptcy to overshadow our rising Indian
operations," said P. Balendra, vice president of GM India. "The Indian
customer enthusiasm was courted."
GM and other manufacturers have also developed a strategy aimed
directly at India's emerging middle classes, who for the first time
have enough income to afford a car. GM, which has long marketed
Cadillacs to the comfortable and Corvettes to the need-speed crowd,
has developed ad campaigns peddling its line of "mini-cars" to India's
car-hungry young professionals.
Ads call the Chevrolet Beat "Tough, Smart" and show a giant
purple beating heart and a young, well-dressed Indian woman with a
laptop bag, next to a sleek compact car.
"There are so many females who want to buy cars, and the numbers are
even greater than the males," said Naresh Agarwal, manager of the
Maruti Driving School in Gurgaon, the high-tech corridor outside New
Delhi. "So many young Indian women are working in the back office
outsourcing campuses. The chief concerns are lack of safety at night.
The families want them to have their own transport."
Part of the secret to India's success is that it is producing cars
that fit the "sweet spot," or a budget of less than $7,000 for first-
time car buyers. While the United States continues building gas-
guzzling tanks, India has perfected the "mini-car." Tata's famed Nano,
the world's cheapest car, is an extreme example. It costs about $2,000
and sales are reportedly brisk.
With far lower labor costs, GM India is more willing to be innovative.
The company recently announced that it will join Reva, India's
electric-car company, to roll out a new vehicle this year.
Outside the 300-acre GM plant in Talegaon, engineers with fresh
haircuts and briefcases in hand eagerly offered their résumés, hoping
to be one of the scheduled 800 hires in a new engine plant opening in
Talegaon and for GM's research and development center in Bangalore.
Inside on the line, Mamankar Pravin, 19, said his parents are wheat
farmers and saved their money to send him for a technical diploma. He
stood in line for days to get this job and is making three times what
his parents make threshing wheat. He put on his goggles and got to
work putting the trim on a bright green Beat.
"My parents are very proud," he said. "Sometimes I think this job is
like a dream."
[Special correspondent Ria Sen in New Delhi contributed to this
report.]
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/14/AR2010...405371.
FAQ
Search
Profile
Private Messages
Log in
