GM in Talks With Isuzu Motor to Develop Engines, Products for Indian market

Friday, Feb 26, 2016

The local unit of General Motors is in talks with global partner Isuzu Motor of Japan to explore the possibilities of sharing engines, vehicle platforms or even products for the Indian market.

A Bharat Stage IV diesel engine for GM's Tavera is high on the discussion list, as the US auto maker seeks to keep the multipurpose vehicle, its warhorse in India, in the portfolio beyond 2017 when the current emission standards will become obsolete.

Another is the possibility of co-badging a future MPV of Isuzu, which is codenamed RU30, five people in the know of the plan told ETAuto.

The discussion happens at a time when GM is undergoing a makeover in India, a market where it is present for two decades, but remains a fringe player.

The company, which had to recall about 1.14 lakh Taveras over emission issues in 2013, is working on revamping its product portfolio and facilities and improving the image of the badly battered Chevrolet brand in India.

The company's annual sales volume has almost halved from 2011 to about 50,000 units now.

"General Motors is currently undergoing a major cleanup act. The management is all new. The plant in Gujarat is likely to be sold shortly. The company is also expected to retire some of the Chinese platform models like Sail U-VA and Enjoy," said one of the five people.

"These tie-up talks are part of GM's endeavour to strengthen its appeal in the utility vehicle space."

A GM India spokesperson called the information "market speculations" and refused to comment further.

An Isuzu India spokesperson termed ET's queries speculative and said the company is completely focussed on the launch of its new range of ISUZU D-Max pickups and all its efforts are concentrated on this.

Sources said the tie-up possibility with Isuzu is part of a bridge plan the US car maker is working on, even as it readies the all-new emerging markets GEM platform products for introduction in India by 2018-2019.

From GM's perspective, exporting cars out of the Talegaon plant and the new Beat and Chevrolet Essentia compact sub-4 metre sedan, along with a planned crossover Beat Active, will keep the India operations active in the interim, said one of five people in the know of the company's plan.

Isuzu is likely to start production of the RU30, a Toyota Innova competitor, by the end of 2017 and the Japanese pickup specialist may share the vehicle with GM within a year.

"Discussions are currently on between both the engineering and sourcing teams to decide the depth of sharing components as well as full-fledged vehicles, and what could be the potential combined volume opportunity for GM-Isuzu," said a second person.

If the talks go through, it would offer GM a key product in its portfolio. Isuzu will gain from economies of scale by sharing its vehicle platform and engine with the US partner.

This will help GM India have range of utility vehicles, right from Rs 6 lakh to Rs 30 lakh, starting with the Beat Crossover (planned for 2018), Tavera for fleet market, Spin MPV for personal buyers, the big size RU30 MPV and Trailblazer, the premium SUV.

GM's Tavera is in fact old-generation Isuzu Panther. It is available with a BS III engine.

The US car maker had got into a tie-up with local engine supplier Sonalika for sourcing a BS-IV engine, but it appears GM was not happy with its performance.


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