GM Daewoo will invest 1.74 trillion won (around $1.5 billion) in the expansion and restructuring of its production facilities, new models and diesel engine development, the company’s president said on Thursday.
The investment is scaled up from a previously announced 41 billion programme.
By 2006, when GM Daewoo will introduce a sports utility vehicle (SUV), the company is forecast to finally take over the former Daewoo Motor’s plant in Pupyong.
GM Daewoo president Nick Reilly said in a news conference at the Pupyong plant that the company will hire 1,000 workers in accordance with the construction of two new production facilities, expansion of existing plants, introduction of three new models and the engine development.
Reilly said the 1.74 trillion won plan is the largest single investment for the company’s parent, General Motors.
Reilly added the investment is expected to contribute to easing severe conditions of youth unemployment in the nation.
GM Daewoo will spend 570 billion won in SUV development, 100 billion won in large sedans, 475 billion won in diesel engine development and plant construction, 25 billion won in facility expansion at Changwon Plant, 145 billion won in new subcompact development, and 420 billion won in the takeover of Daewoo Powertrain and transmission development.
The company will develop and assemble a new next-generation subcompact, project name M-200, at its manufacturing complexes in Changwon, South Kyongsang Province from November. Some 145 billion won will be spent on that project.
A groundbreaking ceremony for a new diesel engine plant for GM Daewoo will take place in June on 19,140 square meters of ground in Kunsan. Once the factory is completed in April 2005, it will annually produce 25,000 units of Euro-4 Standard 1.5–litre and 2-litre engines from 2006.
GM Daewoo recently signed a contract with VM Motori for cooperation in diesel engine technology.
GM Daewoo will roll out a new SUV in 2006 and two large sedan models in 2007. The luxury sedans with 2.8-litre and 3.6-litre engines will be based on GM Holden’s models and assembled at the Pupyong plant.
Reilly said the Pupyong factory is expected to satisfy the core criteria for GM’s takeover of the plant by 2006 when it starts producing SUVs in addition to Kalos. The plant has to be operated on two-shifts prior to takeover. GM Daewoo will also buy Daewoo Powertrain, a transmission-producing company and invest 420 billion won for next generation transmission development.