Mumbai: World's largest automaker General Motors is planning to launch a mini car in India, Rajeev Chaba, president and managing director, General Motors (GM) India, said today. Production of the small car is expected to begin in the first half of next year, he said. Although he did not name the model, the mini car is expected to be the Chevrolet Spark.

Chaba was addressing reporters at the launch of GM's sports car, Chevrolet SRV.

The company will utilise the increased capacity of its Halol plant for the initial roll-out of the mini car, he said. The Halol plant is expected to reach a capacity of 85,000 units this year against the company's current sales of 45,000-50,000 cars, he added.

Chaba said the company would also get excise benefits with the launch of the mini car. The government had announced excise duty cuts for small cars in this year`s budget. He, however, said the company is yet to take a final decision on its second plant.

He said the company intends to get into the volume-driven small car segment to increase volumes in India, but did not specify how the company intends to meet the additional capacity needed for the mini car. "We are looking for, and still deciding on the alternate capacity. But, at the moment, we cannot give a definitive answer," he said.

The Chevrolet SRV has a price tag starting from Rs6.97 lakh ex-showroom in Delhi and is targeted at young professionals. The car is also available with `option pack` with additional features at a price of Rs7.51 lakh (ex-showroom Delhi).

Chaba said GM India would also launch a CNG variant of its premium Sedan Optra in July this year and a diesel variant early next year.

GM India's parent, General Motors, meanwhile, reported a fall in sales in the US because of higher interest rates and volatile gas prices.

The US company, which last year sparked a price war by offering big discounts to consumers, confirmed it would launch a limited-time, zero-per cent financing offer on many of its 2006 models. GM executives, however, said the company would avoid massive discounts to drive up volumes to the previous summer's record highs.

GM, with a 23 per cent share of the US market, saw its US auto sales slip eight per cent in the first five months of the current year.