GM Plans a Compact for $4,000

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General Motors Co. is targeting the emerging ultra-low-cost car market with plans for a compact for around $4,000, possibly producing it in Asia.

The segment is attracting increasing attention from manufacturers eager to keep sales momentum in developing markets following the sharp slide in car sales in North America and Western Europe.

GM Plans a Compact for $4,000

"When Tata Motors in India came out with their $2,500 Nano vehicle, it put a lot of auto makers on the spot," said Nick Reilly, GM's newly installed executive vice president, international operations.

Tata started shipping the much-hyped Nano to domestic customers in July, with a base price of just under $3,000, and executives have talked of selling versions of the car in the U.S., Europe and emerging markets over the next two or three years.

GM already makes micro minivans with Chinese partners that it plans to export, and is looking to expand that product range. Reilly said that SAIC GM Wuling Automobile Co. will likely sell "significant numbers" of vehicles outside of China, though not under the Wuling brand because GM does not own the branding rights.

Almost two-thirds of GM sales were outside North America in the first half of the year. Reilly, former head of its Asian business, was chosen last month by Chief Executive Fritz Henderson to oversee all international business from headquarters in Shanghai, in part because of his track record in developing alliances.

General Motors Eyes $4,000 Ultra-Low-Cost Car