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GM revamping India operation, product portfolio to revive sales

The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009. REUTERS/Jeff Kowalsky/Files

By Aditi Shah

NEW DELHI (Reuters) - General Motors Co (GM.N) is restructuring its India operation and evaluating its product portfolio, the U.S.-carmaker said on Thursday, as it looks to revive falling sales and increase market share in Asia's third-largest economy.

"There are many aspects of the business that we need to work on to make sure we are efficient," Mary Barra, the company's chief executive officer told reporters in New Delhi, adding that India was significant to GM's global success.

"In China we play in the core of the segments and here in some cases we are more on the fringe or we are not across the major segments. What we are evaluating here is what is the right product portfolio," said Barra.

India is expected to become the world's third-largest passenger car market by 2018, moving up from sixth place today, according to IHS Automotive.

Car sales in the country are reviving and are expected to grow by 5-10 percent this fiscal year that started on April 1, after falling for two consecutive years.

GM plans to launch 40 new products in India and other international markets excluding China, north America and Europe, Barra said, without providing a specific timeline.

Despite a portfolio that includes compact cars, a favorite among buyers in India, GM has faced stiff competition from Korea's Hyundai Motor Co <005380.KS>, Japan's Honda Motor Co <7267.T> and Maruti Suzuki India (MRTI.NS), which together account for two-thirds of car sales in the country.

GM, which entered India in 1994, saw its market share fall to 3.2 percent in the fiscal year ended March 31 from 3.3 percent the year before, industry body data showed.

"We are undertaking right now a transformation and a significant restructure of our organization including India and we are building our strategy," said Stefan Jacoby, executive vice president of GM's consolidated international operations.

The company has started exporting cars from India to Chile, and Jacoby said making India an export hub for the Asia Pacific region "could be one of the options."

GM has recalled about 29 million vehicles worldwide this year, of which about 25.7 million have been in the United States, mainly because of potentially lethal issues with ignition switches.

"At the end of Q2 we said and still continue to believe that the recalls ... are substantially complete," Barra said, adding that GM was working to "build defect-free vehicles" in future.

(Editing by Mark Potter)