General Motors, the world's largest automobile company, is planning to set up a research and development centre in India for basic design of cars for its global operations.
The automotive giant is looking to leverage India's strengths in information technology to design new cars using computer-aided design.
In the process, it will become the first automobile multinational to set up an R&D unit in India. Other MNCs currently have only homologation units to Indianise cars designed for other markets.
P Balendran, vice-president (corporate affairs), General Motors India, said: "General Motors is looking at India to set up an R&D centre after taking into account India's prowess in information technology. The centre will be 100 per cent export oriented and could design cars for any of General Motors' brands, not just Opel."
"India has advantages like low labour costs and a very wide base of qualified, English-speaking, IT professionals. Even in terms of quality, it is very competitive," he added.
General Motors, thus, might conceptualise and design cars in India, which will then be built by the company in various parts of the world.
Balendran said the company was likely to choose Bangalore, which has earned the tag of being India's equivalent of the Silicon Valley, for setting up this '100 per cent export-oriented' centre.
The company is still giving finishing touches to the strategy. However, the General Motors brass in Detroit is expected to visit India to launch the centre, once the plan is final.
This is the first time that a leading automobile firm has announced its intention of setting up an R&D centre in the country.
The development is significant for India also because global automobile R&D is a multi-billion dollar function. The R&D spends of several automobile companies run into billions of dollars per year.