ID :
63864
Tue, 06/02/2009 - 17:10
Auther :
Shortlink :
https://www.oananews.org//node/63864
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GM facing difficulties in raising funds in India
New Delhi, June 2 (PTI) Bankrupt General Motors Tuesday
said it is facing difficulties in raising funds for its
under-construction engine transmission plant in India,
involving an investment of USD 200 million, due to the
apprehensions of financial institutions.
The company also said the falling sales of General Motors
India, the wholly-owned subsidiary of the US firm, were mainly
due to customers' perception on the months-long uncertainty
over the future of GM, which finally filed for bankruptcy
protection in a New York Court Monday.
"It hasn't been easy in India to raise the money (USD 200
million). Frankly, we have found difficulties from Indian
financial institutions, but we have not given up," GM Group
Vice-President Nick Reilly told reporters in a conference
call.
"The majority of the fund remains to be raised. It might
take us little longer, but the opening of the plant is largely
on schedule. It may be delayed by a month or two," he added.
Reilly also said that the company's sales in the past
couple of months have been declining in India on account of
"customers' perceptions" in view of the uncertainty prevailing
in the US market over the parent company's fate.
"We have seen some decline (in sales) in the Indian
market in the last few months, obviously the market is weak.
But mainly, I think, it was because of customers' response due
to widespread coverage on what was happening in the US,"
Reilly added.
According to Society of Indian Automobile Manufacturers
data, GM India's sales showed a constant fall in the first
four months of 2009, by 29.18 per cent, 12.64 per cent, 27.25
per cent and 13.67 per cent respectively.
GM India's sales in May was down 11.75 per cent at 5,109
units from 5,789 units in the year-ago period.
Reilly said the company's sales during May in the Asia-
Pacific region, however, increased by 44.5 per cent at 1.83
lakh units, which was mainly driven by growth in China. It has
also consolidated GM's market share in the region to 8.4 per
cent in 2009 from seven per cent earlier.
"The market has been quite weak and our competitors
Maruti Suzuki and Hyundai Motor India have been very
aggressive in terms of market incentives, but we can't match
them," Reilly said.
The company is hopeful that it would make a turnaround by
increasing local components in its products, he said, adding,
"Once our engine plant is complete, an important portion will
be locally sourced." It would also undertake some aggressive
marketing programmes.
In August last year, GM India had announced setting up of
a power-train facility at Talegaon with an initial investment
of over USD 200 million, which was in addition to the USD 300
million already invested in the car manufacturing facility
having a capacity of 1.4 lakh units.
The power-train unit, to be operational in the third
quarter of 2010, will have a capacity of making two lakh units
a year and could be expandable up to three lakh engines per
annum.
Asked by when the company is expecting to complete the
raising of USD 200 million for the engine plant, Reilly said,
"Indian financial institutions are a bit worried for what has
been going on in the US, but hopefully they will come forward
now after the filing. We are talking to two financial
institutions at present, both Indian and global."
Reilly, who is also the President of GM's Asia Pacific
operations, said the Indian operations is insulated from the
bankruptcy filing by the once numero uno in the US.
"We need to find our growth in Asia Pacific. India is a
very important market for our growth. we are still bringing in
new products in (the) Indian market," he added.
GM India plans to launch a luxury sedan Chevrolet Cruze
in September, besides introducing a "mini car" by the end of
this year in the country. It will also launch the LPG variant
of its small car Spark this week.
On making India an export hub, Reilly said: "In future,
there can be significant exports from India. For that we need
to have relatively high localisation to be competitive in
terms of cost effectiveness, but that is not happening in the
next 12 months." PTI
said it is facing difficulties in raising funds for its
under-construction engine transmission plant in India,
involving an investment of USD 200 million, due to the
apprehensions of financial institutions.
The company also said the falling sales of General Motors
India, the wholly-owned subsidiary of the US firm, were mainly
due to customers' perception on the months-long uncertainty
over the future of GM, which finally filed for bankruptcy
protection in a New York Court Monday.
"It hasn't been easy in India to raise the money (USD 200
million). Frankly, we have found difficulties from Indian
financial institutions, but we have not given up," GM Group
Vice-President Nick Reilly told reporters in a conference
call.
"The majority of the fund remains to be raised. It might
take us little longer, but the opening of the plant is largely
on schedule. It may be delayed by a month or two," he added.
Reilly also said that the company's sales in the past
couple of months have been declining in India on account of
"customers' perceptions" in view of the uncertainty prevailing
in the US market over the parent company's fate.
"We have seen some decline (in sales) in the Indian
market in the last few months, obviously the market is weak.
But mainly, I think, it was because of customers' response due
to widespread coverage on what was happening in the US,"
Reilly added.
According to Society of Indian Automobile Manufacturers
data, GM India's sales showed a constant fall in the first
four months of 2009, by 29.18 per cent, 12.64 per cent, 27.25
per cent and 13.67 per cent respectively.
GM India's sales in May was down 11.75 per cent at 5,109
units from 5,789 units in the year-ago period.
Reilly said the company's sales during May in the Asia-
Pacific region, however, increased by 44.5 per cent at 1.83
lakh units, which was mainly driven by growth in China. It has
also consolidated GM's market share in the region to 8.4 per
cent in 2009 from seven per cent earlier.
"The market has been quite weak and our competitors
Maruti Suzuki and Hyundai Motor India have been very
aggressive in terms of market incentives, but we can't match
them," Reilly said.
The company is hopeful that it would make a turnaround by
increasing local components in its products, he said, adding,
"Once our engine plant is complete, an important portion will
be locally sourced." It would also undertake some aggressive
marketing programmes.
In August last year, GM India had announced setting up of
a power-train facility at Talegaon with an initial investment
of over USD 200 million, which was in addition to the USD 300
million already invested in the car manufacturing facility
having a capacity of 1.4 lakh units.
The power-train unit, to be operational in the third
quarter of 2010, will have a capacity of making two lakh units
a year and could be expandable up to three lakh engines per
annum.
Asked by when the company is expecting to complete the
raising of USD 200 million for the engine plant, Reilly said,
"Indian financial institutions are a bit worried for what has
been going on in the US, but hopefully they will come forward
now after the filing. We are talking to two financial
institutions at present, both Indian and global."
Reilly, who is also the President of GM's Asia Pacific
operations, said the Indian operations is insulated from the
bankruptcy filing by the once numero uno in the US.
"We need to find our growth in Asia Pacific. India is a
very important market for our growth. we are still bringing in
new products in (the) Indian market," he added.
GM India plans to launch a luxury sedan Chevrolet Cruze
in September, besides introducing a "mini car" by the end of
this year in the country. It will also launch the LPG variant
of its small car Spark this week.
On making India an export hub, Reilly said: "In future,
there can be significant exports from India. For that we need
to have relatively high localisation to be competitive in
terms of cost effectiveness, but that is not happening in the
next 12 months." PTI
