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The Indian unit of General Motors Corp. (GM) Tuesday said it is going ahead with its planned expansion projects despite the financial problems at its U.S. parent company.

"All expansion plans are on track," Karl Slym, president and managing director of General Motors India Pvt. Ltd., told a news conference. "There have been no changes to any investment plan."

Slym's statement comes less than a week after the Detroit-automaker announced that the expansion in India was no longer "self-funding."

"We have been profitable since 2004 and we have been doing all our investments through internal accruals," P. Balendran, vice-president at GM India, said separately.

Balendran declined to elaborate on the financial condition of GM India.

GM said last week that it is in talks with the governments of Germany, the U.K., Sweden, Canada and Thailand to secure $6 billion in financial aid by March 31 as part of a restructuring program. The company is facing one of the biggest downturns in U.S. automotive history, leading to declining vehicle sales and forcing closures of several factories.

GM India, which began operations in 1996, has two factories in the western state of Gujarat and Maharashtra.

The Gujarat factory has an annual capacity of 85,000 vehicles, while the Maharashtra plant, which started operations last September, can currently produce 140,000 vehicles a year in a single-shift operation, said Balendran.

GM India is also investing more than $200 million to start its first car engine and transmission factory in 2010.

Balendran said the engine factory will have an initial capacity of 160,000 engines a year, which can be scaled up to 300,000 units.

Slym said GM India has no plan to retrench staff and reiterated the company's product introduction plans for this year.

GM India will introduce the Chevrolet Cruze sedan in mid-2009 and its third small car by December, Slym said.

"(The Indian) economy is in the doldrums," Slym said. We don't expect to see a return to normalcy until later this year but our launch plans are on track."

The automaker currently produces six cars and sport-utility vehicles of the Chevrolet range, including the Spark minicar and Optra sedan.

"We plan to sell 35,000-40,000 units of the Spark in 2009, compared with 31,600 units last year," said Balendran.

GM India's total sales are expected to increase by at least 9% to 10% in 2009, Balendran said. It sold 65,702 cars and sport-utility vehicles in 2008, up 9.5% from the year earlier.

At the same time, total passenger vehicle sales in India are expected to remain flat or decline about 2% this year, said Balendran.

"About 60% of our growth is coming from smaller towns and cities and we will continue to focus on these areas," Balendran said.

-By Romit Guha and Santanu Choudhury, Dow Jones Newswires: +91-11-4356-3305; santanu.choudhury@dowjones.com