GM DAT MAY SOURCE PARTS FROM INDIA

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GM Daewoo Auto & Technology (GM DAT) is looking at India as a sourcing base for auto components as well as a major market for supplying completely knocked down (CKD) kits.

The company is also ready to roll out a next generation Matiz, developed by its R&D facility at its Kupyang plant near Seoul.

However, the launch of the car in India, widely tipped as Chevrolet Spark, would depend on GM India's current due diligence of Daewoo's Surajpur assembly unit near Delhi. The due diligence is likely to be completed in two-three months time. In fact, an upgrade variant of the small car (Matiz II) is being supplied to markets like Chile as Spark.

"Our component requirements are met mostly (80-85%) from South Korea. While we expect purchasing from China to grow, we are also looking closely at two other markets India and Thailand. And we believe we will have competitive suppliers in these two countries," Mr Nick Reilly, president and CEO, GM Daewoo, told a group of journalists from India.

According to him, since coming under GM's control, the company has adopted advanced techniques and systems from the parent at all of its facilities in Korea.
It also adopted GM's Global Manufacturing System, new IT systems and Change Management Process among others, that have already started yielding results.


Further, the company has improved the utilisation of its supplier base by implementing GM's Worldwide Purchasing system. As a result, orders to the tune of $600 million are with Korean suppliers from GM Worldwide.

However, he said, the company has not set any targets for sourcing from India.
"We have not sourced from India earlier and may source for next generation Optra. Companies with track record of supplies to GM India and GM Worldwide are definitely on the list," he added.

Meanwhile, GM Daewoo's success has been in export markets and the products manufactured by it are sold in 120 countries globally including India. The CKD kits for Chevrolet Optra are exported from Korea to India and the company executives are happy that Optra has done well and are looking at growing the business (with Indian market). "We have started with Optra and are clear that's not where we are going to stop," Mr Reilly said.

"We recognise a large segment of that market (India) is in small cars. Matiz was sold and was quite successful. We want to make it work for us and for GM India," he added.

He said the company is working on that but there is "no guarantee".

"It is not a finalised programme yet, since we need to check on the suppliers and the due diligence on the factory has to be completed. But, that's the direction (in which) we are heading," he pointed out.

Mr Robert J Moran, GM's vice-president - manufacturing, Asia Pacific region said the facility (at Surajpur) is quite good. And some Daewoo products will be rolled out from there. "If we don't come with a product (read small car), that accounts for about 80% of the market, "then there is no purpose in doing it".

India, he said, is fast emerging as a big market for passenger cars after China. Over a period of time, one can see India emerging as a low-cost manufacturing hub. With two large markets in China and India, the Asia Pacific region will be a key market in the years to come, he added. 

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