General Motors Europe confirmed an all but open secret on Wednesday (10 July): assembly of the Opel/Vauxhall Mokka will move to the Corsa plant near Zaragoza, Spain, in the second half of 2014.
“[We] made this joint decision because of the high demand for the vehicle in Europe. At the same time, additional capacity for small SUVs will be created at the plant in Bupyeong (Korea) that has been the unique source of production so far,” Opel said in a statement.
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Opel CEO 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 underutilisation of available production capacity in Europe and therefore is good news for the entire organisation.”
German newspaper Handelsblatt last month said GME was ‘considering’ shifting Mokka production from GM Korea’s Bupeyong plant. In March, Opel strategy chief Thomas Sedran said the second generation model would be manufactured in Europe, not Korea. The Korean plant also makes Chevrolet and Buick brand versions – Australian unit Holden does not sell its own variant.
Concerned at the planned closing of the Bochum plant while GME was continuing to import models from Korea, Opel’s works council head last year called for Mokka output to come to Europe.
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By GlobalDataThe chairman of the European Employee Forum (EEF), Wolfgang Schäfer-Klug said today: “It is not only great news for Zaragoza but for all plants in view of the improved overall capacity utilisation. 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 an initial phase, US$80m will be spent at 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,” GME said.
Since launch last summer, the Mokka has been a success, exceeding expectations in many markets and is now among the three best-selling SUVs in several. Small SUVs are a growth segment across the continent and Peugeot (2008) and Ford (Indian-sourced EcoSport) are the latest to weigh in. The segment is price-senstive so automakers need to keep a close eye on both production cost, reliability of supply and flexible model mix. Moving the Mokka should achieve this for Opel/Vauxhall while parent GM has reportedly said recently that Korea is becoming an increasingly more expensive country in which to make vehicles.
Recent political tensions on the peninsula and GM’s increasingly fraught relations with local labour unions are also likely to have played a part in the GME Mokka move.
Korean unions, at least initially, won’t be losing out too much. European production will start with assembly of CKD kits shipped from Korea (the plant supplies other mainly Chevrolet brand assembly lines in China and India), but localisation will gradually increase, GM said.
“This is another great day for Opel/Vauxhall,” added Neumann. “After the recent decision of GM to invest EUR4bn in its European operations and an additional commitment to invest EUR230m in the development centre in Ruesselsheim, this is further proof that we are on the right path.”
The biggest winners are Opel/Vauxhall customers and employees in Europe, claimed Neumann.
“With this investment, we will be able to produce more Mokkas and to more quickly serve our customers.”
