According to a report by the Reuters news agency, General Motors has plans to make India its new manufacturing and export hub in Asia, due to rising costs in South Korea.

The plan is said to be part of GM’s strategy to increase its sales in India, where it is currently making a loss despite its 18 years in the market.

The company will launch a range of newly designed sub-compact cars and is targeting at least a 5% share of the Indian market within the next 10 years, with annual sales of eight million vehicles.

Stefan Jacoby, GM’s chief of international operations, is quoted as saying: “India may be the last ‘big white sheet of paper’ in the automotive industry, and we’re pretty optimistic.

We see growth potential there, and we believe that there’s a good opportunity for the Chevrolet brand to take market share. There’s more prosperity and buying power now, with vehicles costing $5,000 more and more likely to sell
in India.”

Mr Jacoby said that South Korea has been GM’s low-cost production and export hub for several years, and it still accounts for nearly a fifth of the group’s global output, but labour costs have risen by about half in just five years.

“We have no concrete plans to close factories in South Korea but, to remain competitive, GM Korea must find ways to drive efficiencies over time”.