Rick Wagoner, chairman and chief executive officer, General Motors, spoke to Business Standard on the Indian market.

What are the challenges that you face in building low-cost cars?

The way to get a low-cost car is to be very efficient in all aspects of design. You also have to make a judgment of what the customer is ready to pay, and you have to meet the safety requirements. We are watching the Rs 1 lakh segment, were the Tatas are coming in, and there is no reason for us to believe that we won't be successful. We can watch and learn from them.

Are you using the Indian R&D centre to develop global cars? Will you design cars here?

There is a lot of engineering work being done here which is like CADCAM kind of crash testing of cars, but over time we are bringing in more work and the full range of engineering work in Bangalore.

Did you underestimate the Indian market size, at about 2 million by 2010?

In the last two years the market has grown faster. But the question to ask is what happens when you are growing at 15-20 per cent? Do you think this will stay forever? The answer is, it cannot. Of course overall GDP growth in India is high and we will reassess the numbers.

GM and Suzuki had talked of a small car to be built jointly. What happened?

Suzuki because of its strong position in India had a view on how they wanted to do it and we had needs for other markets.

The conclusion was that we had enough volume to make do on our own and they had enough volume to make do on their own. We decided to go our own ways, but that does not mean we cannot collaborate on components, or power trains.

Do you think not being able to get the Daewoo plant in India slowed you down?

We would have more capacity and we worked on that plant so hard. However the Daewoo Korea plant was useful as it gave us access to a lot of platforms which made us competitive in India. Frankly we got delayed as we thought we had the solution for India, but that did not work and we decided to build our own plant.

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