GM Plans Assembly Plant in Mexico: Factory to Build Compact, Subcompact Cars
Posted on: Friday, 31 March 2006, 06:00 CST
By Michael Ellis, Detroit Free Press
Mar. 31--Even as General Motors Corp. closes plants in the United States, the automaker plans to break ground on a car assembly plant in Mexico, where sales are strengthening and GM is the market-share leader.
The plant in the central Mexican state of San Luis Potosi, will employ 1,800 to 2,300 workers, GM spokesman Carlos Gelista said Thursday.
GM will invest $600 million to $650 million in the plant and its tooling. The Mexican government contributed incentives to help fund construction, he said.
Construction will begin in late May or early June and the compact and subcompact vehicles will begin rolling off the assembly line in 2008. GM has no plans to export any of the cars to the United States, Gelista said. He did not identify which vehicles would be built there.
"We are looking to try to export some of the production of that plant to Central America and South America," he said.
Even with the gas prices running at about $2.50 a gallon, there's little demand in the United States for subcompact cars like the Chevrolet Aveo, said Catherine Madden, a senior analyst with Global Insight.
Gas prices would have to stay at $4 a gallon for a year to spur demand for subcompacts, she said. "There's not a lot of indication that Gen Y is going to jump into the subcompact segment."
GM sold 68,000 Chevrolet Aveos in the United States last year. Demand is much stronger for compact and subcompacts in Mexico and South America.
GM told Mexican media about the plant a week ago but didn't release information to U.S. media. GM might have been trying to keep the news quiet to not upset the UAW, said Guido Vildozo, director of South American and Central American forecasting with Global Insight.
"I guess they're awfully cautious to make sure that nobody in the UAW feels hurt by this decision. That's the reason they've kept a low profile on the news release."
GM imports several top-selling vehicles, including the Chevrolet HHR small car and Buick Rendezvous SUV, from Mexico. GM builds some Chevrolet Silverado pickups and Chevrolet Suburban and GMC Yukon XL large SUVs in Mexico as well as the United States.
Gelista said building the cars in Mexico would cut costs from importing them from Europe, Asia and South America. The new plant will build 30 vehicles per hour, he said.
The plant likely would build about 50,000 cars annually, Vildozo said.
-----
Copyright (c) 2006, Detroit Free Press
Distributed by Knight Ridder/Tribune Business News.
For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.
NYSE:GM,
Source: Detroit Free Press
Related Articles
- The U.S. Renewable Energy Group & A-Power Energy Generation Systems, Ltd. Announce Plans To Build a Wind Energy Turbine Production and Assembly Plant in the United States
- Honeywell to Automate the Largest Green Diesel Plant in the United States
- Terra Transforms the Digital World with the Relaunch of Terra TV in the United States and Latin America
- Ternium Plans to Invest US$4.2 Billion in New Flat Steel Plant in Mexico
- Azteca America Central Florida, the Mexican Consulate in Orlando, and Casa De Mexico Present the First Series of Mexican Cinema
- United Health Programs of America Signs Exclusive Agreement To Distribute CallMD
- US DOE Takes Delivery of Chevrolet Equinox Electric Vehicle
- Dell Eyes Latin America to Expand Market Share: Dell Sales Outside the United States -- Predominantely Latin America -- Rose 33 Percent. That's Prompted Dell to Put More Emphasis on International Growth
- NADAguides.Com and Car Crazy Central Announce Partnership
 |
 |
User Comments (0)
RSS Feeds