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Friday, Sep 18, 2009
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Business Daily from THE HINDU group of publications Friday, Sep 18, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Outlook Magna could steer Opel to low-cost route in India
Murali Gopalan Mumbai, Sept. 17 With Magna International of Canada now in the driver’s seat at Opel, there is not likely to be any dramatic impact on the Indian landscape in terms of a slew of models hitting the roads. What is more likely to happen, though, is that the country could emerge a low-cost sourcing hub for critical components to Opel in Europe. Transfer to IndiaAnd if Nissan’s much publicised move to transfer production of the Micra from the UK to India is anything to go by, there is no reason why an encore cannot be done with some models of Opel, especially from the Belgium plant which is reportedly in some trouble. For most carmakers, especially in Europe and North America, the way forward is to keep costs in check which, in turn, necessitates inexpensive production bases. Production hubObservers say Magna Steyr, the subsidiary of Magna International and a contract manufacturer for Daimler and BMW among others, would be perfectly placed to steer Opel through its Indian arm which has been here since the 1990s. This, they add, could even take the form of a global low-cost car which could use India as one of its production hubs, on the lines of what other European automakers such as Fiat, Volkwagen and Skoda have planned using the supplier base here which offers the ideal mix of reliable quality at affordable costs. However, in the case of Opel, it will take a while before a full-fledged India blueprint is in place. After all, Magna would need some time to settle down in its new role and grapple with the immediate problems of cutting costs and pruning manpower. Sourcing components from low-cost countries is inevitable but even here, East Europe could take precedence over India. ‘No stranger’The Opel brand is no stranger to this country. When its erstwhile owner, General Motors first set up shop here in the mid-1990s, the Opel Astra was its offering to the Indian customer. The car carved a niche for itself in the upper mid-size segment and there was a premium tag attached to it. However, GM could not quite build on this advantage and successive Opel-branded models hardly made an impact. The American carmaker shifted to the Chevrolet badge by end-2000 and the Opel chapter was soon forgotten as models from Korea made their way into India. Today, with Magna in charge and GM relegated to the second place, it will be interesting to see how quickly it can seize the India advantage for Opel. Magna unit gets orders from Hyundai, Japan co Magna to set up unit to make car window systems More Stories on : Outlook | Cars | Brands
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