GM to shift production of next-generation Chevrolet Cruze from Korea to Europe

Article by Anita Panait, on November 8, 2012

General Motors will not produce its next-generation Chevrolet Cruze compact car in Korea, raising speculations that the carmaker may shift production to Europe to raise the efficiency at its Opel unit. A spokesman for GM Korea confirmed statements by local labor union officials that GM will not build the next Cruze in South Korea.

Sergio Rocha, president and chief executive of GM Korea, recently divulged the decision to its South Korean union, union spokesman Choi Jong-hak said. According to Choi, Rocha disclosed that the revamped Cruze will be produced in five regions, including Europe, the United States and China. GM currently builds the Cruze in the US, China, Brazil and South Korea, as well as Russia, albeit in smaller numbers.

GM’s decision is part of its efforts to better manage its global manufacturing footprint, according to GM Korea spokesman Park Hae-ho. The present Cruze model accounts for 50 percent to 60 percent of the total output, pegged at around 260,000 vehicles, GM Korea's plant in Gunsan, Park said. GM Korea’s Gunsan plant also produces the Chevrolet Orlando sports utility vehicle and Lacetti small car.

The next-generation Cruze is set to be the first vehicle to use a GM global platform, which could underpin 2.5 million compact sedans and crossovers by 2018, sources previously told Reuters. The next-generation Cruze will be rolled out in late 2014. In December 2011, GM chief executive Dan Akerson put forward the idea that the cost-cutting at its Opel unit could be complemented with shifting output from Asia to Europe to make its plants in the continent more efficient.

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