GM could fight Nano with Chinese help

SAIC-GM-Wuling Automobile Co. came to the attention of many for the first time thanks to last week's snafu involving the inclusion of 500,000 Wuling-produced cars in GM's corporate tally in an effort to stay at the head of the pack. But the latest word is that the American company could leverage that relationship in future to develop a car that will compete with Tata Motors' Nano.

Developing such a low-cost, developing market car is in GM's own best interest. As the more developed markets near saturation and their economies stagnate, new markets are increasingly driving sales of new vehicles. In places like India and China, where many car buyers are upgrading from scooters or motorcycles, the lower the price point the better.

GM's 34% interest in Wuling could parlay into a useful tool in combating the Nano in such markets. According to GM CEO Bob Lutz even increasing GM's stake in the Chinese company is "not impossible over time" although he did note that "it's nothing we'd want to talk about today," reports Automotive News. So while a GM Nano-fighter might not be the first thing on the list, it's a real possibility.

Room has even been made in the budget to allow for developing a low-cost small car. By using legacy architectures and parts, GM could produce a vehicle that would meet target market goals - although it would not be viable for sale in "the developed world because it wouldn't meet regulations" says Lutz.