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Swatch's car project in India hits roadblock

Swiss giant Swatch Group's much-touted small car project for India has run into rough weather with the world's two largest carmakers -- General Motors and Ford -- refusing any ties with the venture.

While Swatch has been talking about serious negotiations with GM and Ford for a joint venture to produce its new hybrid car in India, both the US-based auto giants have refused to acknowledge any negotiations.

"No talks are underway with Swatch for any venture,'' both the auto majors have stated.

Despite repeated attempts, Swatch Group's South Asia area sales manager Ravi Thakran refused to comment on the statements by GM and Ford.

He had earlier said, ''We are under negotiations with Ford and GM among others on the matter but are yet to decide on the final partner. India is being considered as a production base for this (small car) project. As of now, the proposal is under evaluation. It would be too early to say anything firm on the launch schedule of the car in India.''

However, General Motors India president and managing director Richard Swando dismissed talks on the car project saying, ''We have not come across any such dialogues for a joint collaboration with Swatch concerning India.''

Senior Ford India officials aired similar views saying, "There has never been any talks of either a joint venture or a possible tie-up between Ford and Swatch in India. Moreover, all decisions regarding Ford's overseas subsidiaries and tie-ups are taken in the US and we are yet to hear anything about such a venture. Just talking among yourselves doesn't make a venture.''

Both GM and Ford already have subsidiaries in India and are currently producing mid-size cars. GM had recently introduced the Opel Corsa, while Ford had rolled out the Ikon, which is currently the best seller in the mid-size category of the Indian automobile industry.

Though both the companies have announced that they are exploring the small car segment for a possible rollout, no time-frames and models have been finalised as yet.

Swatch Group's company SMH Automobile had recently developed a four-wheeler drive hybrid car, which is eco-friendly. The company had announced that its mass production, too, can be undertaken at a reasonable cost.

The car, which could be made available in the 1000cc to 1400cc engine category, has an independent torque control on each wheel.

The vehicle is claimed to offer improved fuel consumption and low emission levels due to its specially developed combustion engine. It can also be connected to an electrical system to be recharged overnight.

Swatch Group had forayed into the car market with the Smart small car through a joint venture with Daimler-Benz. It did not, however, prove to be a major success and the need for large investments forced the Swatch Group to reduce its holding in the joint venture.

Meanwhile, Swatch has already got the Foreign Investment Promotion Board, or FIPB, approval to set up a wholly owned subsidiary in India for manufacturing and assembling wrist watches for domestic and export markets.

The company, however, is still undecided on setting up the venture and has decided to delay manufacturing by two years. It will initially import watches from Switzerland and test market them here.

The group has already introduced in India its other watch brands -- Omega, Rado, Tissot and Longines -- through dealer networks.

UNI

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