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Hindustan Motor kit to power GM Travera

New Delhi, Oct. 22: The Indian unit of US-based General Motors Corp will outsource engines and transmissions from Hindustan Motors for its utility vehicle Travera, scheduled for launch around the middle of next year.

GM India will launch the Travera under the Chevrolet brand name with a sticker price of Rs 6-7 lakh and powered by a 1.6-litre diesel engine.

Hindustan Motors, one of the countryís oldest auto companies, will manufacture Traveraís engines and transmission systems at its plant at Pithampur in Madhya Pradesh.

Currently, General Motors manufactures the German-engineered Opel Astra, Corsa, Optra and Swing models at its Halol plant in Gujarat. But, this facility does not make engines.

GM officials said the localisation would help the carmaker reduce manufacturing costs and price it competitively against Toyota Motorís Qualis utility vehicle.

Currently, General Motors has a share of about 2 per cent of the nearly 6 lakh-a-year new car market. Analysts said the carmakerís absence from the high volume low-price segment of hatchback cars has restricted its market share.

While General Motors entered the country by launching the luxury Opel Astra, its competitor Hyundai gained sales volumes by targeting the small car segment with its Santro model.

Also, the 1.4-litre Corsa with an output of 88 bhp is priced much higher at Rs 5.25 lakh while the 1.3-litre, 85-bhp Esteem model from Maruti Udyog costs Rs 4.66 lakh.

GM, which is expanding its dealer network to 65 by next year, has also decided against appointing any new dealers in the eastern region.

However, auto analysts said the car maker had under-priced the Chevrolet Optra model at Rs 7.89 lakh in order to grab market share from its Japanese rivals.

The Optra is a fully-loaded car but cheaper than other cars in the C-segment like the Toyota Corolla, Mitsubishi Lancer which are priced in the Rs 10-lakh band.

Earlier this year, General Motors said the company was raising its annual output capacity from 25,000 cars to about 50,000 cars, taking its total investment in India to Rs 1,600 crore.

General Motors bought the entire stake of its Indian partner, the C. K. Birla group in 1999. Birla and General Motors were equal partners in General Motors India, which is now a wholly-owned subsidiary of General Motors Corporation.

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