The decision means the Detroit-based manufacturing powerhouse will compete in India without an ultra-compact competitor to the country’s most popular car, the Maruti Suzuki Alto, and the (in)famous ‘world’s cheapest car’, the Tata Nano.
The admission comes just days after Renault announced it too was unlikely to produce an ultra-compact cut-price car with its Indian developer, Bajaj Auto.
GM India president and managing director, Karl Slym, said that after years of investigation, the company decided the Rs 1 lakh ($2100) car project did not make economic sense.
“There is no decision now to go below the segment where the Spark is present and all future models in our portfolio in India will be positioned above this car,” Mr Slym said.“It was under discussion when the [Nano] came in. We have reached a decision that it is not right for us.”
GM has two production facilities on India – in Halol, Gujarat and in Talegaon, Maharashtra. By the end of next year, it plans to invest $US500 million ($476 million) in its Indian operations, ramping up local production by 80 percent to 410,000 units per year, and putting more effort into research and development projects.