January 1, 2012: Lowell Paddock, President and MD, General Motors

You are taking over the India operations of General Motors at a time when the Indian passenger car market is facing a slowdown. How do you perceive the challenges and what is your strategy to penetrate the market?
I am certainly coming to India at an unstable time. I think we just have to be very creative about the products that we offer to customers; we have to give them a very compelling value story. For example, if you look at the Beat diesel as being the most fuel efficient vehicle in India, that is a story that really resonates with customers. Lower operating costs, fuel efficient and fun to drive and I think your colleagues (at Autocar India) have all recognised that as a very impressive vehicle. And for vehicles like the Tavera that have a very strong and long reputation, we need to make sure that they remain fresh. I don’t think we can allow our portfolio to go stale in any way. We not only need to refresh the products that we have but also bring in a new twist in the market. So at a time when growth is slowing down, it’s time when you have to be tough, tough in marketing and tough in products.

What is your priority for the Indian market?
My priority right now is to bring to market the products we are launching this year in a very efficient manner. Because the market is a little down this year, the best way to deal with it is to first bring to market products that will surprise customers. The Tavera Neo3 with the new 2.0-litre common-rail direct-injection diesel engine that is BS-IV emission compliant will come to market very soon and the 2.2-litre AT Captiva will be introduced in the first quarter. Two more new products are the Chevrolet Sail hatchback and the Chevrolet MPV from the GM-SAIC Motor Corp partnership. The Sail will be a strong addition to our expanding mini-car platform in India which today includes the Spark, Spark LPG, Beat, Beat LPG and Beat diesel. The mini-car platform in India is the biggest, fastest growing and the most imperative segment. It is in fact the most complicated and demanding mini segment in the entire world. The Sail integrates global technologies and design elements and is powered by a locally developed Smartech petrol and diesel engine that will provide an excellent combination of high power, high fuel efficiency and lower emissions. It will go on sale sometime this year.

Which other new models do you plan to launch in India this year?
We have already made the key four launches for the year. The rest of the year will see more derivatives of some of those vehicles.

The Beat diesel is the first of GM’s small cars with a diesel engine. What will be your approach in terms of introducing more diesel-engined cars?
Our Talegaon plant is the only plant of its kind in General Motors that has the ability to flex between petrol and diesel, so we are not held hostage by the market by having a dedicated plant for petrol or diesel. And that allows tremendous flexibility in the marketplace. The good news is that we now have the diesel engine localised and we are able to meet the demands of the Beat. And certainly tomorrow we will be talking about how to expand the availability of that engine and bring other products from that engine family to the market. I think the clear message that is coming to us is that being competent in diesel is extremely important in the Indian market and we recognise that. So if you look at our commitments that we have made with the Beat diesel, and the upgrades of the Tavera and the Captiva, all those have very compact diesel engines. We now understand the needs of the market and will quickly respond to it. The Beat, Cruze, Optra, Tavera, and Captiva have diesel options. So far we have only three petrol options and the diesel portfolio will be further expanded in our future models, which is well represented from our investments in our Talegaon facility.

How much more investment does GM plan in its India operations?
It is tough to say at this time but since we have been in India, we have invested over US$ 1 billion here. That investment really has paved the way for the products that we are announcing now and some others that we will be announcing at the end of this year and next year. But in terms of specific figures, I would rather not comment on them now. All that I would like to say is that we are prepared to expand if the market demand entails.

What about plans of expanding your manufacturing footprint?
That depends on which way the market grows. We certainly have the capability in our Pune operations to expand from where we are today. We assume that there will be a time when we will need to expand but that will depend on the marketplace. And we can respond very quickly because we are prepared for the demand and we hope that it comes. We would like to focus our attention on expanding in our existing Pune facilities where we have built enough capability.

Would GM look at exports from India to its global operations?
We have the capability to do that and we have discussed it. If the opportunity presents itself, we would certainly be open to doing it. But it has to be something that makes economic sense. Clearly, India has strong capabilities as an export base and I don’t see why that cannot be a possibility in the future although there is nothing concrete today.

Which markets would you ideally look at for exports?
Markets which are similar to India like BRIC and emerging-type markets. I think what is important are markets where diesel and right-hand drive are important. Or where there is a demand for mini-cars. Certainly, the most interesting and the most important characteristic of the Indian market is that it is driven by mini-cars and that is something that sets India apart from other markets in the world. So in terms of export opportunities, we would look at the possibility of leveraging our presence in the mini-car segment.

What is the role of the Indian market in your global operations?
India is an extremely important market for us in terms of the partnership that we have with SAIC and the level of investments we have made. The first thing to do is to launch the products that we have successfully and understand the marketplace, as customers have very specific demands and requirements and the market has some very specific characteristics.

What has GM learnt from its India stint till now?
I like to live by a line which says that ‘in India, by India and for India’. This means that we need to have a presence in the marketplace, we need to leverage the skills of the tremendous marketplace here, and we need to develop markets that are catered or designed to meet Indian market and customer requirements. So those three concepts really drive our business here.