General Motors’ strategy to restructure the company by off-loading some of its struggling car brands is finally seeing the light of day. The company has managed to sell its European subsidiary Opel Motors to Magna from Canada, the military-style SUV brand Hummer has been taken over by a Chinese company and now a deal for the Saturn brand is in the making.
Interestingly, GM is tapping Indian car majors like Tata Motors and Mahindra & Mahindra to consider a deal for Saturn. The grapevine in the U.S. suggests that bankers handling GM have been pushing for a possible sale to Indian car manufacturers.
The small car brand Saturn is a familiar brand in the United States just like Hyundai and Maruti Suzuki in India. General Motor. It was setup by GM in 1985 to rival cost-effective Japanese car manufacturers like Toyota and Honda. Saturn’s small cars have attracted huge sales over the past decade but GM’s multi-brand strategy had prevented it from developing new models which might have led to its current sorry state.
GM’s bankers favour Tata Motors as its acquisition of Daewoo, Jaguar, and Land Rover brands has brought it worldwide recognition. Mahindra too has been actively working on building a presence in the U.S. car market with its models Scorpio, Bolero, and Xylo. However, it might not be easy for Indian car manufacturers as they will have to fight off bids from Chinese buyers as well as Magna, a Canadian firm.
It is the most unlikely thing to happen in near future. Toyota is immersed up to it neck in loans and is struggling to come out of it. Mahindra would not risk buying it as it cannot afford to take such a huge risk now. GM should forget India and look elsewhere. Perhaps, small car manufacturer Suzuki will be interested.
The arrival of the Jaguar variants XF and XK gives the Indian customers an opportunity to access their premium products for the first time. However, Tata being mainly in the low-to mid-end segments in India, we have to wait to know how it will perform in the luxury segment, which is ruled by Porsche and Mercedez