Reuters

March 17, 2008 - 6:25 am ET

NEW DELHI (Reuters) -- General Motors wants to launch a second small car in India in the next two years as it looks to capitalize on growth in emerging markets to offset any sluggishness in U.S. sales, a senior company official said.

The model will not compete directly with Tata Motors' low-cost Nano but will be cheaper than GM's current lowest priced car in India, David Reilly, GM group vice-president, told a news conference on Monday.

Small cars less make up nearly three-quarters of India's market. GM offers the Chevrolet Spark in the sector for about 300,000 rupees ($7,350).

"We need some thing lower than what we have got now. I think if we could find a vehicle less than that, it would not only benefit India but could benefit other places also," Reilly said, without detailing how much the new model would cost.

"But I would not call it an equivalent of Nano."

Tata Motors unveiled the $2,500 Nano, the world's cheapest car, in January and said the new four-seater would roll out later in the year from its West Bengal factory.

Reilly said sales growth in emerging markets would outpace any softening in established markets like the United States and would help maintain the firm's total global sales expansion.

"I don't predict a slowdown, but this year U.S. would be tough," he said.

GM, which has a 3 percent share of the Indian vehicle market, has a manufacturing plant in the western state of Gujarat and is building a second facility near Pune in neighboring Maharashtra state.

Reilly said the first trial car from the Pune plant, which will begin commercial production in the last quarter of 2008 with an initial production capacity of 140,000 vehicles, would be rolled out on Wednesday.

The company also plans to build an engine plant in India, but Reilly would not share details.

"We are still in some negotiations ... We absolutely intend to go ahead with it," he said, adding that the company would be give further information within the next two months.

Pictures, please. [ Where's the "this-thread-is-worthless-without-pictures" symbol? ]

All this means to me is that GM will have less money to spend here in the USA, where I live, to bring more great new products to market. Not happy news.

All this means to me is that GM will have less money to spend here in the USA, where I live, to bring more great new products to market. Not happy news.

by the time the greenies, commies, and import humpers (redundant, i know) get done with our legislation, this will probably be what you get stuck with driving to work in 3-4 years

All this means to me is that GM will have less money to spend here in the USA, where I live, to bring more great new products to market. Not happy news.

GM's a global company..obviously, they are going to invest in emerging markets that have growth potential.

All this means to me is that GM will have less money to spend here in the USA, where I live, to bring more great new products to market. Not happy news.

Or we could look at it as spending money to make money. GM only has 3% of that market, and that's horrible. If they do well in India, that means they'll have more cash to throw into some more great products for our market.