Date:07/08/2008 URL: http://www.thehindubusinessline.com/2008/08/07/stories/2008080751130300.htm

Back General Motors to focus on tier III & IV towns to increase sales

Our Bureau

Chennai, Aug. 6 General Motors India is targeting sales of 85,000 vehicles during the current calendar year, with a sizeable increase in its sales coming from Tier III and Tier IV cities and towns. With a certain degree of saturation in the metros and mini-metros, GM India is sharpening its focus on capturing fresh demand that is coming in from buyers in small towns particularly in the south and west.

Speaking to Business Line, Mr Ankush Arora, Vice-President-Marketing, Sales and Service, GM India said that the contribution from Tier III and Tier IV towns such as Kurnool, Madurai, Guntur, Tirupur, etc in the South will increase in the months to come. To this end, GM will also focus its network expansion to cover a big chunk of this market.

The company’s dealerships and sales and service network has already grown from 104 outlets last year to 134 outlets till date. This is further set to grow to 188 by the end of this year. Much of the expansion will happen in Tier III and Tier IV cities, Mr Arora said. GM is also hoping to position the Spark, its entry-level small car, as a good value proposition to buyers in these markets.

Commenting on the company’s region-wise sales trends, Mr Arora said that the southern market, which has traditionally trailed the north and the west, has had a remarkable growth during the last few months and now contributes about 27 per cent of GM’s total all-India sales, an equal measure with the west.

With a total sales target of 85,000 vehicles from its Chevrolet stable, GM will be able to cater to most of this projected demand by utilising its production capacity at the Halol plant. Its second plant at Talegaon, Maharashtra that is scheduled to commence production early next month, will have a gradual ramp up of capacity.

It is expected to run at its full capacity of 1.4 lakh units by 2010 when GM will be launching its next new passenger car. Initial capacity utilisation at the Talegaon plant is expected to be about 60,000 units.