General Motors India, a subsidiary of General Motors Corporation on Wednesday announced a top-up of $500-million investment to the $1 billion it has already committed to invest here.

The company’s timing is significant as it comes a day after Tata Motors suspended work on its Nano car project in Singur over land woes. GM India’s new investment plans conform to automaker’s optimism about investments in India, disregarding the current industrial slowdown.

The additional investment, spread over seven years up to 2015, will go into capacity expansion at Halol, setting up a new plant in Talegaon, including a powertrain unit.

“The company will invest half a billion dollar in India over next seven years to keep the growth momentum. A good part of this will go into the development of new models, including a small car next year, and upgrading the existing ones that will result in a new Optra in 2010,” said Karl Slym, president and managing director, General Motors India, at the launch of its utility vehicle, Tavera Neo 2. Maruti Suzuki India (MSIL), Hyundai Motor India (HMIL) and Ford India have also announced their plans for more investment.

At the recent annual general meeting of MSIL, Suzuki chief Osamu Suzuki had asked Maruti to increase its focus on R&D for small engines in India as the demand for such cars would surge in the near future. Suzuki Motor Corporation of Japan is seeking around 90% research & development on smaller engines here against 30% being done by MSIL. Suzuki is developing India as a base for small cars. Petrol engines below 1,200cc and diesel engines up to 1400cc have now got excise benefit from the government at 12% duty.

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