Bloomberg News

General Motors Looks at India, Asia, Africa for More Capacity

October 11, 2011

Oct. 11 (Bloomberg) -- General Motors Co., the biggest U.S. automaker, is looking at India, Association of Southeast Asian Nations member states and Africa as sites for expanding production to tap growing demand in emerging markets.

“If there were two areas that I thought were open to additional investment, those would be India and the ASEAN area,” Tim Lee, GM’s president of international operations, said in an interview in Dubai.

India’s economy, the third-largest in Asia after China’s and Japan’s, is forecast to grow 7.8 percent in 2011 and 7.5 percent next year, the International Monetary Fund said in September. India will probably in the long term become Detroit- based GM’s third-biggest market after the U.S. and China, Lee said. The company builds vehicles in India in a joint venture with Shanghai-based SAIC Motor Corp.

There is a “need to look at more production facilities, but this is yet to be done,” Lee said in the interview yesterday.

The U.S. automaker increased sales in India by 17 percent in September to 10,112 vehicles, with growth propelled by the diesel-powered Chevrolet Beat small car, GM said on Oct. 3. The automaker has estimated that it accounted for 3.4 percent of India’s car market in the first nine months of this year.

“We expect to grow our share dramatically in India over the next 12 to 18 months,” Lee said.

The executive, who was recently on a visit to Cairo and is headed to Johannesburg, said Africa is an emerging growth area “that would likely support some additional capacity.”

South Africa, where GM builds vehicles in Port Elizabeth, and Egypt, where it has a plant in the Cairo suburb of Maadi, account for 70 percent of the U.S. company’s sales in Africa, the manufacturer said on Nov. 22, when it announced a reorganization of operations in the region.

--Editors: Tom Lavell, David Risser

To contact the reporter on this story: Tamara Walid in Abu Dhabi at twalid@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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