Interview with Lowell C Paddock, President and Managing Director, General Motors India

ZW: A lot of companies are hedging production against exports to ride out the market. What is your take on this strategy?

Lowell: Frankly, I don’t see that as a great strategy and we definitely have our focus on the domestic market. Not just in terms of sales but from a production perspective as well. It’s about the economics of the business and it is practical for us to work on localisation as opposed to being further subjected to a plethora of global scenarios. Obviously the market today is a combination of both global and domestic dynamics and that cannot be overlooked but with a local focus it gives us stability.

India is one of the most complicated markets in the world. The largest segment is mini vehicles and profit margins aren’t very high on those, and there is a need for policies to govern elements. However from a GM perspective, I feel that the investments made in the past have been good decisions. A prime case would be our diesel plant which is paying off in today’s market.  

ZW: How do you feel GM India will do this year? We know that sales have taken a hit across the board and the current trends aren’t very conducive towards sales.

Lowell: The market is down; however we are optimistic about the end of the year. Having said that, we are being cautious as well. Our growth depends on individual segments as well and we are looking at introducing some products in segments that we currently have little or no representation. By doing so we hope to drive our numbers to a healthy figure by year end. The festival season is something that all manufacturers are looking forward to and we are no different on that front.

From a long-term perspective the government will have to take the decision to implement an action oriented policy that aims at creating a conducive marketplace. Interest rates, which are one of the biggest issues hampering sales right now, will have to come down, and a standard policy on governance of fuel pricing needs to be looked at. These are just some examples but the fact remains that active decisions need to be made to cultivate growth.

ZW: Considering the current market conditions, what is on your immediate agenda? Is there a change in play or course of action?

Lowell: Our plan is to stay on course and move full speed ahead. We have worked towards achieving our goals set for the term and our new product introduction plans remain unchanged. We haven’t held back on localisation plans either, so to put it simply, we are not changing course and intend to add the right stimulus through the introduction of our new products.

ZW: Products definitely hold the key. What are the segments you are looking at and could you elaborate on your portfolio spread? 

Lowell: Well, we have just introduced the face-lifted Captiva and the upgraded Cruze and our current products, namely the Beat and the Tavera continue to bring in the business. The Spark is also a product that is in high demand. However it is showing its age and we have planed to launch a facelift by the third quarter of this year. The Optra continues to be offered but we are looking at its life cycle and will take a decision on this product shortly.

As for new products, the plan is to introduce the SAIL notchback and the SAIL hatchback, which will replace the current Aveo range. We also are looking at bringing in the Enjoy MPV. With these products we will have a broader portfolio and this will work towards driving our sales figures.

There has been speculation of GM offering a hatchback slotted between the Spark and the Beat but we have no such plans and as far as the Trailblazer is concerned, we aren’t considering its introduction in the market at this point of time. It is a great vehicle and is solid competition to the Fortuner, but our current focus is on volume segments and we will target those first.

ZW: Lastly, could you elaborate on the SAIL and Enjoy?

Lowell: The SAIL will be offered as a hatchback and a notchback. This model will replace the current Aveo line up. In fact the SAIL hatchback has been christened as the SAIL U-VA. Incidentally the SAIL will be offered with a 1.4-litre petrol and a 1.3-litre diesel. The diesel unit is the licensed multijet from Fiat and it is a proven engine here in India as well. The notchback will compete against the entry level midsize sedans such as the Dzire, Verito and Etios.

The Enjoy is a very different vehicle. It does fit in the MPV/MUV market space; however it is a product that we have designed from the inside out. While it does compete against the Ertiga, the Enjoy offers more space and on that front is more comparable to the Innova. The focus has been on functionality and I personally have found the Enjoy to be a very impressive vehicle. It shares its engine offerings with the SAIL and is set to be competitively priced.