NICK REILLY, General Motors Group vice-president

Your new Talegaon plant has a lot of capacity. How much of that will be for exports and how much for the domestic market?
There’s no question that we see India as a potential export site and we have tripled our capacity from 60,000 last year to what will be 225,000. So, if we use that number just for the domestic market, it would get us to a substantially higher market share. We would love to reach that, but clearly we would use some of that for exports in the relatively near term. But if we are even more successful than we hope to be in the domestic market, then there is space to expand that capacity.What we are focused on right now is getting that plant started and broadening our range in the Indian market. Over the next two to three years, it is going to be largely the domestic market we will focus on.Also, there are some products which we are working on but haven’t announced yet. These models will probably first be introduced in India and they can also be used elsewhere around the world, which means huge export potential. But it all depends on how successful we are and how markets grow. So you could be talking about an export figure of 10 per cent or even 50 per cent but I can’t put a number on it just yet.

Would the all-new products that you plan to launch first in India be small and cheap cars which have big demand here?
That’s a fair enough assumption. Clearly, we are primarily focused on the small car segment to grow our share of the market. I think we’ve already said that there’s room for us to have a second small car, well a third small car if you include the Chevrolet Aveo U-VA. So we believe we’ll have another entry into that segment. But I wouldn’t restrict it to just that — there are other segments in India that are growing, maybe not as fast and maybe not as big. Also, I would not restrict ourselves to Talegaon. We can use our complete capacity across India for any products.

But how does the two-plant strategy work? What are you going to make in each plant?
To get the right mix between the two plants is something that’s going to evolve over the next couple of years. This will be dependent on how successful we are in the market. But by and large, one could say that the Talegaon plant is likely to produce high-volume products while Halol will be more effective as a flexible plant, producing lower volumes in different segments.

You are also investing in an engine plant. Can you tell us what engines you plan to make there?
We are going to make an announcement on our engine plans in the next month or two and I don’t want to pre-empt it. We want to localise the engine as much as possible, so obviously we are looking at large numbers and that means a small engine. It could be diesel or petrol.

Though your powertrain arrangement with Fiat is over, you still have the IPR for its engines. As some of the engines you produce could be similar to what Fiat makes, would it not have made sense to produce engines jointly with them to increase scale?
That’s correct. We have the IPR for those engines but it is our preference to be self-sufficient if we can. If we can get enough volume to justify an engine plant for our own use, we would go down that route. If not, we would talk to others for a joint manufacturing programme. However, our relationship with Fiat was quite tricky in the end and so that is not the company we would naturally go to first.

With the high-volume car plant which includes stamping facilities and an engine plant, will there will be a big thrust on localisation?
Absolutely. Our objective is to get our localisation target much higher than before. A couple of years ago, we were happy with 40 or 50 per cent.

But the I163 (Tavera) is 90 percent.
Exactly. That’s our best position for localisation and frankly one we’d like to be with for all our products here in India. We may not get to 90 per cent with all of them but our powertrain localisation makes a big difference, so do volumes. So we are aiming for that sort of localisation.