General Motors shall sign a new agreement with Maharashtra government to set up a new engine and transmission plant in the state. The new plant shall be located in the Talegaon region where the second plant from General Motors shall soon start its operations.

According to the company spokesperson, it shall be an extension of the Talegaon facility but he refused to divulge the details of investments made.

General Motors shall have a capacity to manufacture 140,000 units at its second plant taking its annual capacity to 250,000 units annually. It presently manufactures Chevrolet Optra, Chevrolet Aveo and Chevrolet Spark in the state.

 Currently, Ford India has set up its engine plant in Chennai that shall cater to its domestic demands as well as export demands from overseas markets.

It also aims to manufacture a new small car to double its market share in the country. The estimated sales of passenger cars in India are projected to reach 2 million units by 2010 out of which small car sales would comprise nearly two-third of the sales figures.

 Tata Motors and Bajaj Renault also plan to launch a small car in India in next two years. Tata also plans to launch compressed air car as well as electric car as alternative fuel source cars in India.