The downward revision has been predominantly owing to the delay in the launch of its premium hatchback Aveo U-VA (1.2 litre), which will be out only in December, a delay by 5 to 6 months from the earlier scheduled launch period, said P Balendran, vice-president, GM India.
"The company had plans for an earlier launch of U-VA with a bigger engine. However, when the Union government, in the recent budget, announced the excise benefits for small cars with specific engines, we decided to avail of the benefits for U-VA. More time was required for remodification of the vehicle with the new 1.2 engines," Balendran clarified.
Fitting the U-VA with a 1.2 litre engine will help GM bring down the selling price and thus be competitive in the highly price-sensitive segment. The U-VA will be positioned against Maruti Suzuki Swift and Hyundai Getz.
In the Union budget, excise duty on cars having an engine capacity up to 1.2 litre (petrol-based engines) and 1.5 litre (diesel-based engines) and length of the car up to 4 m was reduced to 16 per cent from 24
per cent.
This year, GM India launched mid-size sedan Aveo in March and Sportsback Optra SRV in July.
GM India has sold 24,027 units from January to August 2006 as against 20,322 cars in the same period in 2005, a growth of 18 per cent.
GM India's sales during August 2006 were down on account of the Gujarat floods. The company sold 2,720 cars in August 2006, a decline in growth by 14 per cent compared to 3,159 cars sold a year ago.
The sales comprise 1,706 units of Chevrolet Tavera, 312 units of Chevrolet Optra and 702 units of Chevrolet Aveo.
The company had to shut its Halol (Baroda)-based plant for a few days during the floods. Sales to Maharashtra, another high-selling state for the company, was also hit during August.
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