General Motors (GM), the world's largest auto producer, is to build a new plant in India.

It will be the second Indian plant for the company, which has set its sights on gaining a 10 per cent share of the country's fast-expanding passenger vehicle market by 2010.

GM will invest more than $300 million in the factory, which will be located in Talegaon in the western state of Maharashtra.

Initial annual capacity for the plant has been set for 140,000 units. Capacity can be increased as the market expands, Rajeev Chaba, managing director of GM India, told reporters.

The plant will begin production in the third quarter of 2008.

"GM is serious about being a serious contender in India's automotive market," Mr Chaba said.

"Small cars make up the largest segment in India, and we don't expect that to change."

GM already has a plant in Halol, where it is expending production to 85,000 units from 60,000.

A significant proportion of demand for platinum and pgms comes from the vehicle manufacturing sector, as the metals are used in autocatalyst technology.

Ÿ Adfero Ltd