Official: GM is moving Opel Mokka output from Korea to Spain

Article by Anita Panait, on July 11, 2013

General Motors is shifting a large part of the output of the new Mokka subcompact sport-utility vehicle from South Korea to Spain. GM's Opel unit has received around 110,000 orders from Europe for the Mokka since the SUV was launched in June 2012, a spokesman for the division disclosed. Opel will commence producing the Mokka at its Zaragoza site in Spain in the second half of 2014.

The production shift could help the Zaragoza site achieve full output capacity and protect its 5,800-strong workforce, Opel said. The Zaragoza currently builds the Corsa compact and Meriva compact van, which are experiencing slumping demand. The Corsa and the Meriva saw their sales in 2012 drop by 14 percent and 36 percent, respectively.

Opel chief executive Karl-Thomas Neumann was quoted as saying that the move will allow them to build the Mokka in greater numbers and supply customers faster.

Opel posted $1.8 billion in losses in Europe in 2012 partly due to very high fixed cost of plants operating below capacity. Vehicles sales in crisis-hit Europe dropped to its lowest figure in 20 years in May 2013. Opel approved the closure of its Bochum site in Germany in April 2013, which is considered crucial to its management's strategy to return to profit as early as 2015.

After the first five months of 2013, Opel controls 6.8 percent of the new-car market in the European Union, while Volkswagen has 12.6 percent, Ford has 7.5 percent; and Peugeot has 6.2 percent.

Zaragoza site workers will initially employ kits from South Korea to assemble the Mokka, with an aim gradually increase the vehicle's local content in coming years. GM will invest EUR80 million to prepare the Zaragoza site for Mokka production.

Press Release

Opel/Vauxhall to produce Mokka in Spain’s Zaragoza plant in 2014

Production of the Opel/Vauxhall Mokka is coming to Europe. GM’s plant in Zaragoza (Spain) will start producing the successful small SUV in the second half of 2014. GM and Opel/Vauxhall leadership made this joint decision because of the high demand for the vehicle in Europe. At the same time, additional capacity for small SUV’s will be created at the plant in Bupyeong (Korea) that has been the unique source of production so far.

Opel CEO Dr. Karl-Thomas Neumann said: “The decision for Zaragoza follows our company's strategy of building vehicles where we sell them. The enormous demand for the Mokka underlines the attractiveness of our vehicles, adds momentum to our product offensive and secures jobs in Europe. The decision will help address the underutilization of available production capacity in Europe and therefore is good news for the entire organization.”

Chairman of the European Employee Forum (EEF) Dr. Wolfgang Schäfer-Klug stated: “It is not only great news for Zaragoza but for all plants in view of the improved overall capacity utilization. Opel/Vauxhall management has now fulfilled a long-standing request from the EEF to produce our small SUV in Europe. This is really a win-win situation for everybody in Opel/Vauxhall.”

In the initial phase, US$ 80 million will be invested in Zaragoza for production. The decision to produce the Mokka in Europe is helping to safeguard 5,800 jobs in Opel’s Spanish plant, which is currently producing the Corsa and Meriva.

Since the launch of the Opel/Vauxhall Mokka in the summer of 2012, the vehicle has been a success. Not only is the stylish SUV popular with experts, but customers as well. The Mokka is among the three best-selling SUVs in several European markets.

While the initial European production will be based on CKD-kits (CKD = Completely Knocked Down), with parts coming from Korea, localization will gradually increase.

“This is another great day for Opel/Vauxhall,” continued Neumann. “After the recent decision of GM to invest 4 billion Euros in its European operations and an additional commitment to invest 230 million Euros in the Development Center in Ruesselsheim, Germany, this is further proof that we are on the right path.”

The biggest winners are Opel/Vauxhall customers and employees in Europe, added Neumann: “With this investment, we will be able to produce more Mokkas and to more quickly serve our customers.”

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