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GM plans price war with Optra

Parvathy Ullatil in Mumbai | October 20, 2003 07:50 IST

General Motors India is gearing up to unleash a price war in the C segment of the Indian car market with a stripped down version of the Chevrolet Optra.

With a cheaper version of the Optra, the company is hoping to grab a piece of the lower C segment (Rs 650,000-780,000) along with Honda City and Hyundai Accent. GM executives, however, declined to reveal the price of the stripped down Optra.

The manual transmission Optra is priced at Rs 824,000-890,000 and competes with the Skoda Octavia and the Toyota Corolla in the C plus segment. It has captured a 26 per cent share in the C plus market since its debut in July.

Till now, 2,600 cars have been sold. The company expects to sell 5,000 cars by the end of December and 12,000 in the first year. It is also preparing to double production at its Halol plant in Gujarat from 25,000 cars per annum to 50,000.

The company was producing 12,000 cars per annum till May this year, but later raised it to 25,000 by working two shifts.

"We are finding it difficult to address the demand for our cars, especially the Chevrolet Optra, which was launched in July. We are now looking at ramping up production from 25,000 cars to 50,000," P Balendran, vice-president (corporate affairs), General Motors India, told Business Standard.

He also said increasing production would not entail substantial investment since the company's facility in Gujarat had the capacity to support the additional production.

The car maker has deferred plans of entering the B segment, by resurrecting the Daewoo Matiz platform, and will focus on the C and D segments for all future product launches.

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