1
NEWS
Holden could export next Cruze
Asian export door opens for Holden as GM shifts production of next Cruze from Korea to EuropeGM Holden could be in line for a lucrative deal to export its next-generation Cruze to a range of populous Asian nations following news that the next-generation small car will not be produced in Korea.
General Motors’ global small car was first imported to Australia from South Korea in 2009, two years before domestic production began in Adelaide in 2011, following a $149 million federal government grant.
Now, in what would be a reversal of roles, Australia could supply Korea with the second-generation Cruze, which is expected to emerge in 2014 and will be produced by Holden from 2015.
A GM Korea spokesman confirmed to Reuters that the new Cruze would not be produced in South Korea, fuelling speculation that GM might shift Cruze assembly to Europe, where GM is in financial trouble and struggling to keep its factories open.
GM’s Gunsan plant currently produces the Cruze for both South Korea and Europe. Apart from Australia, the first-generation Cruze is also produced in the US, Brazil, Russia, India and China, plus Thailand, Vietnam and Kazakhstan.
GM is yet to officially reveal where it will produce the new Cruze, but Holden has confirmed it will do so and, according to Reuters, GM Korea chief Sergio Rocha recently told the company’s union the new model would be built in five regions, including the US, Europe and China.
Holden told motoring.com.au it was premature to speculate on the possibility of Cruze exports to Korea until GM had confirmed which factories would produce the next model.
“It’s too early to say,” said GM Holden External Communications Director, Craig Cheetham. “It depends primarily on other production sites, which are to be confirmed.”
Last year Holden sold a total of 33,784 examples of the Cruze, local production of which commenced in March but continues to include many Korean-sourced parts, in addition to 49,000 Commodore-based vehicles.
Although it remains Australia's third most popular small car, to October this year Cruze sales are down 12 per cent to 25,142, while sales of Commodore-based models have slumped by almost a third to 33,600.
That means sales of Australian-built models have slipped by almost 30 per cent to less than 59,000 so far this year. Meantime, Korea currently produces up to 150,000 examples of the Cruze annually.
Holden has committed to producing two vehicles on two global architectures at its Elizabeth plant until at least 2022, but has not confirmed the second model line it will produce alongside the MkII Cruze when next year’s upgraded VF Commodore is retired around 2018.
However, it says both models need to be top-ten sales performers to be viable and, as we’ve reported, it’s now almost certain the second model will be an SUV based on the all-new D2XX platform, which GM has confirmed will replace both the Delta II and Theta platforms that underpin the existing Cruze and Captiva respectively.
Although it continues to export the current Caprice-based Chevrolet PPV police vehicle to the US in small numbers and will also export the VF Commodore to North America as the 2014 Chevy SS, Holden has always said the viability of its Australian-made models is not dependent on exports.
GM recently restated its commitment to its European operations, including the Opel and Vauxhall brands, but is desperate to end 12 consecutive years of financial losses by 2015 by cutting costs and increasing efficiency in Europe.
Late last year GM CEO Dan Akerson suggested that moving some GM production from Asia to Europe would help the company’s European operations.
However, GM Korea’s union is already strongly opposing the idea of shifting Cruze production from Gunsan, which employs about 3300 workers and last year produced around 260,000 vehicles – up to 60 per cent of which were Cruzes.
“Should (GM) not withdraw the decision, it will face enormous resistance (from workers),” said union leader Min Ki in a statement last week.
“The next-generation Cruze is the lifeline of Gunsan factory,” he said previously. “The plant is flooded with anger about GM which is trying to cut its lifeline.”
A spokesman for GM Korea, Park Hae-ho, told Reuters the company – which has two other plants in Korea – would maintain output at Gunsan by continuing to produce the current Cruze.
“We will seek ways to maintain utilisation rates at Gunsan plant by continuing to produce the current Cruze model,” he said, adding that the union is seeking support from Korean politicians and Korea Development Bank (KDB), GM Korea's second-biggest shareholder.
While KDB owns 17 per cent of GM Korea, GM has previously said it wants to increase its stake in its South Korean operations from almost 77 per cent.
The Cruze Sportwagon joins the Cruze sedan and hatch on sale in Australia this month, while the next-generation Cruze line-up is tipped to also include a coupe derivative.
Read the latest news and reviews on your mobile, iPhone or PDA at carsales' mobile site...
Share this article
Written byMarton Pettendy
See all articlesOur team of independent expert car reviewers and journalistsMeet the team
Stay up to dateBecome a carsales member and get the latest news, reviews and advice straight to your inbox.
Subscribe todayRelated articles
Disclaimer
Please see our Editorial Guidelines & Code of Ethics (including for more information about sponsored content and paid events). The information published on this website is of a general nature only and doesn’t consider your particular circumstances or needs.
Please see our Editorial Guidelines & Code of Ethics (including for more information about sponsored content and paid events). The information published on this website is of a general nature only and doesn’t consider your particular circumstances or needs.
Contact
Advertise with us
Local marketplaces
International marketplaces
Scan to download the carsales app
Want more info? Here’s our app landing page
App Store and the Apple logo are trademarks of Apple Inc. Google Play and the Google Play logo
are trademarks of Google LLC.