Interview with Sumit Sawhney, Vice President (Marketing, Sales and Aftersales), General Motors India

Company Description: General Motors India Private Limited is a 50:50 partnership between General Motors and SAIC that is engaged in the automobile business in India. It is the 5th largest automobile manufacturing company in India. The Chevrolet brand was introduced in India by GM in 2003 and has already emerged as one of the fastest growing automotive nameplates in the country. The Chevrolet portfolio in India includes the Chevrolet Captiva, Chevrolet Optra, Chevrolet Cruze, Chevrolet Aveo, Chevrolet Aveo U-VA, Chevrolet Spark, Chevrolet Beat and Chevrolet Tavera, and soon-to-be launched Sail and Enjoy.

GM India has not been doing well in terms of your products and also profitability. Do you see all these changing with SAIC products coming in?

GM India is a growing brand. We have grown substantially. As a growing brand, we are doing well even today. Last year, we sold 111,000 cars. And currently our presence has been in mini B1 segment and lower medium segment. So we are going to increase our product offerings to consumers by bringing in new products which we have already showcased at the 2012 Auto Expo. We have already launched Tavera Neo3 in both BS-III and BSIV versions. We have already revealed our new Captiva at AutoExpo’12. Apart from that, we have shown two new Chevrolet products i.e. Sail in the mini B2 category; the other one is MPV Enjoy.

GM India had apparently held back investing on diesel engine plants prior to the budget. But now since there has no additional burden on diesel models, what have you thought about it?

I would say the statement is not right because we have invested in our powertrain plant at Talegaon much earlier. And as we had shared earlier, we have got the first flexi-engine plant (adaptable for both petrol and diesel engines). We have already made that investment two years back. So we are well prepared for market dynamics and have not held back any investment for diesel engine plant.

Some of your high-end cars like the Corvette come in LHD configurations. Is it the primary reason that is stopping GM from bringing them into India?

Yes, a few of our international models are available in LHD configurations. That’s always a challenge. But from a performance point of view, we have the relevant models like the Cruze in India. It has been the segment leader with great performance scores. This is the car which has won World Touring Car Championship (WTCC) in 2011 once again. So from that perspective, we have the right products which are apt for the Indian market. As far as our high-end international products are concerned, these LHD cars are not permissible in India.

GM India is still undecided about its Cadillac brand in India. What are the primary reasons behind it?

Currently, we want to focus in India with the Chevrolet brand. Moreover, Cadillac doesn’t have too many RHD configurations. So our first goal is to establish the Chevrolet brand in India and make it extremely strong. And maybe going forward, we may look at the opportunities at the appropriate time.

It’s a known fact that you are launching the Sail hatchback and its sedan version here. Then what will happen to your existing Aveo models (hatchback and sedan) which are positioned in a similar segment?

For any company, there is a product refreshment which keeps on happening. So when these products come in, they will also be getting into the segment where we are already present. With Aveo and the U-VA, we are not available with a diesel option. The Sail twins will come in during the second half of this calendar year. We will strengthen our postion in the B1 and entry-level sedan segments. At this point of time, we do not have any plans to phase out the Aveo models.

Could you talk a little bit about the design studio as well as a powetrain and engineering centre that is located in Bangalore? Is it contributing to your global operations or are they meeting only local needs?

Our technology centre in Bangalore, which is supporting our global programmes, is truly international. Yes, it does support our domestic operations. But it is also supporting worldwide operations. Similarly, we have a design studio within the premises of the technical centre which is working on global products.

Do you see any change in buying patterns of Indian consumers? If yes, what are they? So are you tweaking your marketing strategies for that?

The changes in buying patterns that we have seen in the last one year are that there has been a decline in sales of entry level cars. This is largely due to inflation, high interest rates, rising fuel prices etc. As their disposable incomes have come down, we see a lot of stress in the marketplace. Car buying doesn’t remain a first priority for entry level customers. That’s why we have seen a drop in mini B1 segment. However, being an optimist, I look forward to a positive change coming in. I believe the interest rates have to come down. And inflation also needs to go down. We have already seen crude oil prices hovering at US$ 100 per barrel which could ease a little bit. And yes, we are definitely tweaking our marketing strategies for that. When we witness these kinds of stresses, you want to offer products which are extremely relevant to consumers. Last year, we launched the world’s first one-litre diesel engine in our Beat. That is also India’s most fuel efficient car at 25.44km/litre. If you see from a product point of view, we are offering an extremely relevant car for that segment of customers. People are very conscious of their fuel bills. As a manufacturer, we are the only one which is offering a 3-year/1 lakh km warranty on a mini car. Apart from that, we have Chevrolet Promise, which is our commitment that the cost of ownership will not go beyond a threshold. Even if it does, we will take care of it. If you see from that perspective, we are offering a very attractive price. 

How is your used car business ‘Chevy Certified Pre-owned Vehicles Programme’ doing? How many outlets do you currently have and how much does it contribute to your overall business?

Our ‘Chevy Certified Pre-owned Vehicles Programme’ is doing well. We are currently available at more than 60 locations in the country. We are building the right platform for the consumers to buy or sell used cars. So this is still in the early stages. However, we have increased our presence in 60+ locations. And we will keep on strengthening the same programme. Because it is extremely important from a manufacture’s point of view especially when we have now have a car parc of more than 5 million Chevys in India.

As far as your LCV business, have you decided about any particular branding? Will they be sporting the Chevrolet brand? Or will it be tagged as Tavera?

I would say at this point of time our complete focus is on the MPV and MUV segments. We have already launched the Neo3 BS-IV and BSIII Tavera. And as I mentioned earlier, we have already showcased our MPV Enjoy at the Auto Expo. So right now we are focusing on that and the rest of the products will follow later. We are going sell these cars under the Chevrolet brand. Although products like the minitrucks are in the pipeline, we are presently zeroing in on MPVs and MUVs.

Coming to your products here in India, what are your big plans on the export front?

Right now we are focusing on catering to the domestic demand. This is because we have fairly a bigger market here in India. We do some marginal export to neighbouring countries like Nepal, Bangladesh, Sri Lanka, etc. At this point of time, we would like to concentrate on the domestic market. Once we take care of that, then we may look forward to these kinds of opportunities.

Could you put a timeline for the upcoming launches? And are you interested in bringing the Trailblazer? If yes, will it be assembled here?

Let’s talk about our launches. The new Captiva will be launched in due course.  The Sail hatchback and the Enjoy MPV are expected during H2 CY 2012. We would be covering the SUV only with the Captiva. Right now, we don’t have any plans to bring in the Trailblazer SUV. We are only exploring this segment.

Do you have any plans to assemble the Captiva here? If yes, when? Will it be at Halol?

No, the Captiva SUV is going to be a CBU.

Lastly, you have been with GM India for more than a decade. How would you describe the company’s transition in these years?

I would say when I had joined GM India; we were selling the ‘Opel’ brand. Our volumes were much lower. We used to do a few hundred cars in a month. From that period till now, we have already reached 111,000 units a year. We see a much stronger future with new products coming in 2012-13. I would say the transition has been very exciting. It was a good learning experience. We have entered into new segments and have experienced success in them. So a car like the Beat is now selling 6,000+ units per month alone. So it has been an exciting ride for more than a decade now.