MEXICO CITY/DETROIT: General Motors Co will build its next-generation Chevrolet Cruze compact in Mexico, the company said on Monday, as automakers look to expand in the Latin American nation to take advantage of low labour costs and free trade agreements.
GM will invest US$350 million to produce the Cruze at its plant in Coahuila, as part of the US$5 billion investment in its Mexican plants announced last year.
GM will continue manufacturing the model in Lordstown, Ohio. GM so far has identified only three plants that will make the next-generation Cruze, including in China.
A GM spokesman in the United States said the company's assembly plant in Gunsan, South Korea, will continue building the current Cruze model to meet demand in domestic and export markets.
As part of a new wage deal last summer, GM agreed to build the next-generation Cruze in Korea starting in 2017, in about-face for the automaker.
GM executives have voiced concerns about what they said were higher labor costs in Korea, where the automaker has run into problems with its workers. A
Automakers are looking to move to Mexico for its low labour costs and access to the US market. Toyota is finalising plans for its first passenger car assembly plant in Mexico, people familiar with the matter previously said. Volkswagen recently announced a US$1 billion investment in its Puebla plant.
It is the first time the Cruze will be made in Mexico, a GM spokesman in Mexico said, and production will be mainly for the domestic market. The Cruze is currently imported to Mexico from GM's plant in South Korea, she said.
A GM Korea spokesman said the move would not have a major impact on the production of next-generation Cruze, as export volume from Korea to Mexico are small.
