11 June,2009 11:00 AM IST | | Philippe Mercure
General Motors' bankruptcy declaration in the US has left Indian car buyers wary, despite the brand's huge seduction campaigns. MiD DAY asks around if their worries are justified
General Motors may be bankrupt in the US but in India, it's on a spending spree with new models, ads and campaigns.
While some customers are convinced by GM's arguments, others fear that the company's bankruptcy declaration in the US could affect after-sale service here.
"Bankruptcy is a serious thing. We are not sure how long it will last. What if they close shop tomorrow?" asks Amit Pandya, a 47-year old professional, who is scouting for a car.
GM's committed
This is the kind of question Vikram B S hears every day. Vikram works at the GM Sundaram Motors showroom on Kasturba Road in Bangalore. He says the sales and the number of visits have not decreased since GM filed for bankruptcy on June 1. Those who do drop in, have several questions.u00a0
To help answer them, GM has posted a huge sign on the wall. "There for you. There for India," is the first thing you read when you enter the showroom.
"We won't close," says Vikram. "And your warranty will be honoured if you buy a GM car."
To reassure customers, Vikram shows them the big ads that GM has splashed across all Indian newspapers. He also hands them a written booklet that insists there is "nothing to fear".
GM has repeatedly promised that it remains "fully committed" to its warranties. Auto specialists also point out that companies need to build stocks of auto parts in case of bankruptcy, so customers are unlikely to experience problems.
Not only them
"If GM falls, it won't disappear. Someone will buy it and it will continue," said Vittal Das, who is considering buying an Optra. "GM is a famous company around the world. It's not only them: Chrysler and Ford are also not doing well. All the leading car manufacturers are in the same situation."
GM America said India was among the "very important" markets that would help it get back on its feet.
That's why the company started the aggressive marketing campaign in India. GM also launched the new Chevy Spark LPG last Friday, and plans to launch other new models over the rest of the year.
Tough competition
Christian Navarre, an auto industry analyst with the Telfer School of Management of University of Ottawa, Canada, is following the new GM offensive in India with great interest.
He is not surprised to see all the efforts deployed. "GM is making money in Asia," he says, which is not the case in the US right now.
"Every carmaker is interested in the Indian market, says Navarre. But we have to remember that theu00a0 volume of sales is still marginal for global companies."
But, he says, GM will experience hard competition in India from local constructors like Tata and Mahindra. Unlike Chinese car makers who want to conquer the world, the Indians are developing cars especially designed for the Indian market, without any real focus on exports.
That allows them to build cars that fit Indians needs. And that means hard competition for GM.
Optimistic
GM sold 65,702 cars and SUVs in India last year, a 9.5 per cent increase over the year before. But with only 3.5 per cent of market share, the company still has a long way to go to be one of India's favourite brands.
GM hopes to see its sales increase by 10 per cent this year in India despite the economic turmoil and is optimistic about grabbing a 10 per cent market share before 2010.
65,702u00a0
Number of cars and SUVs sold in India in 2008
GM cars in India
The Chevroletu00a0 brandwagonu00a0u00a0u00a0u00a0u00a0
>>Spark
>>Aveo U-VA
>>Aveo
>>Tavera
>>Optra Magnum
>>Captiva
Opel (now sold to Magna International; line stopped in India)
>>Corsa
>>Astra
