BOMBAY, India -- General Motors India withdrew a bid this fall for the closed Daewoo assembly plant at Surajpur, 18 miles from New Delhi.
GM India had planned to use the plant to build the Chevrolet Spark small car, which is based on a Daewoo design.
But the withdrawal won't change GM's ambitious plans to rebuild sales in India, says Amit Dutta, vice president for marketing and sales at GM India. The company dropped its bid primarily because of government delays in settling with lenders to the beleaguered plant, say industry sources.
The company is using the Chevrolet brand, which was introduced here two years ago, to attract budget-minded customers in India's rapidly growing middle class. Opel, whose sales are plunging this year, will continue to cater to upscale consumers.
GM is a minor player in India. In 2004 it sold 26,166 light vehicles here. No. 1 Maruti Udyog sold 479,548 vehicles.
Chevrolet's lineup is modest: the Optra sedan, which starts at about 800,000 rupees, or about $17,700; the Tavera SUV, which sells for about $14,400, and the Forester, which costs about $28,800.
Chevrolet plans to add two small cars, the Spark in 2007 and Aveo, another version of a former Daewoo vehicle, in 2006. Both cars will be imported from GM Daewoo Auto & Technology Co. in Korea.
Opel sells just one car, the Corsa.
GM is trying to increase its chain of 80 dealerships to 90 to better penetrate the semi-urban and rural areas of the country. GM started selling in India in the early 1990s and is still catching up to such established automakers as Maruti Udyog and No. 2 Tata Motors Ltd. Suzuki Motor Corp. owns a controlling share of Maruti Udyog.
"With products such as the Chevrolet Tavera, we have identified these (rural) sectors as areas of potential growth that would lead to high revenue and enhance brand recognition," Dutta said.
To boost sales of the upscale Optra, GM plans to introduce incentives to reduce the costs of ownership, such as extended warranties and inexpensive service charges.
The Optra has become a competitive player in its segment. In September, 855 units were sold. For comparison, the Skoda Octavia posted sales of 909, the Toyota Corolla, 683, and Hyundai Elantra, 100.
Meanwhile, Opel is struggling in India. GM sold 4,346 Corsas from January through September, down 37 percent from the same period of last year.
GM dropped the Opel Astra in 2003.
Says marketing chief Dutta: "Most of our forthcoming products are likely to be badged under the Chevrolet brand."