General Motors sees rural sales increasing further in India, the second largest market in

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Asia after China for the US automaker. The carmaker aims to sell 300,000 vehicles in 2012 in India.

About half of GM India’s sales come from rural areas currently. “We expect sales to move more towards the rural segment in coming years. Sales contribution from rural areas used to be much smaller earlier,” president and managing director, General Motors India, Karl Slym told Financial Chronicle. GM’s small car Spark and Tavera multi-utility vehicle contribute the most to sales in rural areas at present. And, with the recently launched small car Beat, the carmaker is upbeat about grabbing a larger share in the rural market.

Slym said higher rural sales witnessed by the industry in general and GM’s rural network expansion were the main reasons for higher rural sales last year.

“Last year, 60-65 per cent of our network expansion by 100 dealers happened in the rural areas. The automobile industry is also doing much better in the rural areas now,” Slym said.

China’s Shanghai Automotive Industrial Corporation (SAIC), which owns half of GM India, will enter the Indian market with a light commercial vehicle in the second half of 2011. The company is planning to set up a different distribution network in rural areas for commercial vehicles.

“We will be setting up a new network for commercial vehicles in main purchasing areas once the SAIC vehicles come in,” Slym said. The company also plans to introduce passenger cars, multi-utility vehicles and sports utility vehicles through SAIC in the future, Slym said.

"We are looking to get to 300,000 units of vehicle sales through SAIC as well as the products under the Chevrolet brand in 2012," Slym said.

Buoyed by the strong response to the Chevy 300 series cars Cruze and Beat, the carmaker will introduce a mid-sized car and a sports utility vehicle under the same platform within the next two years.

“We will have one of each of all the 300 series cars in each segment,” Slym said. “The Chevy SUV will come in by the end of this year. It will lie in the same vein as the Captiva SUV. As for the mid-sized car, we have both body styles (large hatch and sedan) available in the menu. It will lie between the Beat and Cruze, more around the Aveo space. It is expected to come in next year.”

The present 300 series platform offerings, Beat and Cruze, which come at a minimum of Rs 3.34 lakh and Rs 10.99 lakh respectively, have a waiting period of 6-8 weeks. “We have started a second shift at Talegaon to cater to Beat’s demand. We are now making 5,000 Beats per month,” Slym said. GM India is aiming at selling 110,000-120,000 cars in 2010.