General Motors has hit upon a new mantra to widen the gap between itself and rival Toyota to become more competitive. CNBC-TV18 reports from Talegaon in Maharashtra, that GM's first step to implement this brainwave is a powertrain plant in India.

General Motors India is not wasting time. It has signed a Memorandum of Understanding with the Maharashtra Government, and has been quick to acquire land, and begin construction of its second plant. The Rs 1,350 crore plant has a lot riding on it.

Rajeev Chaba, President & MD of GM India says, “I think it's a big stake. It's part of our global programme. We need to make sure that we are able to sell our products profitably in this country to justify this investment.”

GM sees a higher level of local content as the key to greater profitability. The powertrain manufacturing plant involves an investment of around USD 300 million.

People can expect diesel versions of cars like the Aveo and the Spark. These new models are expected to hit the roads by 2008 - all from the car-maker's 300 acre plant, which will have a cumulative manufacturing capacity of 2.25 lakh units.

The new plan will be crucial for the 10% market share that GM is hoping to achieve - not only in India, but in the Asian car market as well, by 2010. The additional manufacturing capacity could also mean that GM India will become an export hub.