GM follows Tata Motors into discount auto market

GM follows Tata Motors into discount auto market http://tinyurl.com/ysdjmg
GM (NYSE: GM) does not like to be trumped. Last week, India's Tata Motors (NYSE: TTM) launched a car that costs about $2,500. It is geared
to consumers who only have money to drive motorcycles now. The vehicle may sell well in India, but Tata understands that it could be exported to other emerging markets like Russia and China.
GM does not need any more competition in emerging countries. With its sales flat to down in the U.S. market, the company says its goal is to have 75% of its sales from outside America in just a few years. To do that, GM will need cars to fit the markets, not just versions of GM cars that it can build and sell abroad.
According to The Wall Street Journal, "GM's Asia-Pacific chief is working on developing a car for emerging markets that could play in the sub-$4,000 price range, as the company looks to compete with auto makers that are already building cheaper cars."
The plan may look good, but only if GM can find facilities and a workforce that is cheap enough to build a super-low-cost vehicle at a profit. With wages rising in China and India due to increased demand for products from these countries, the job may be difficult.
GM may want to be in the $4,000 car business, but it is not clear that it is a business which GM can afford.
--
Civis Romanus Sum

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Motorsforum.com is a website by car enthusiasts for car enthusiasts. It is not affiliated with any of the car or spare part manufacturers or car dealers discussed here. All logos and trade names are the property of their respective owners.