UPDATE 2-GM to develop electric car in U.S.; ends Reva tie-up

* Electric hybrid Volt to be launched in India in Q4 of 2010

* GM-SAIC venture to start with small trucks in end-2011

(Adds details, background)

MUMBAI, May 27 (BestGrowthStock) – General Motors [GM.UL] will
develop electric car technology for the Indian market in its
home town of Detroit, after ending a partnership with Indian
firm Reva, the head of its operations in the country said.

Thursday’s announcement follows Indian utility vehicles
maker Mahindra & Mahindra’s (MAHM.BO: ) deal on Wednesday to
acquire a 55 percent stake in Reva Electric Car Company.

GM India, which had originally planned to launch an electric
version of the Chevrolet Spark, will now offer the hybrid
electric vehicle Chevrolet Volt in the fourth quarter of 2010,
after its global launch in November, Karl Slym said.

Carmakers worldwide are investing large sums in electric
vehicles as they seek to meet ever-tighter regulations for
emissions and struggle to pull themselves out of a savage
industry downturn.

In January GM announced it would set up a $246 million
facility to build electric motors to power hybrids and possibly
pure electric vehicles. [ID:nN26115316]

India’s Reva had entered into an agreement with General
Motors India last year to develop electric cars in the country,
including an electric version of the Chevrolet Spark.

“Now with Reva changing its ownership we saw no particular
value in doing this experiment,” Slym said.

Slym said the decision to end the agreement with Reva was
taken around two months ago as GM had a parallel programme to
develop electric vehicles globally.

He did not give a timeframe for the introduction of
full-fledged electric vehicles in the Indian market.

General Motors’ joint venture with China’s SAIC (600104.SS: )
would launch small commercial vehicles in India in late 2011
while passengers cars from the venture will follow a year later,
Slym said.

The joint venture between the two companies was announced
late last year and was formed in February this year, he added.

Stock Market

(Reporting by Janaki Krishnan; Editing by Ranjit Gangadharan
and Jon Loades-Carter)

UPDATE 2-GM to develop electric car in U.S.; ends Reva tie-up