GM Korea resumed production and sales of its Damas and Labo mini commercial vehicles at the end of August after the line was closed down at the end of last year due to viability issues.
The company last year warned that production would be discontinued due to the escalating cost of meeting increasingly stringent safety and emissions standards.
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With the Labo and Damas the only mini-commercial vehicles produced in South Korea, the automaker has decided to return to this market segment. The government, under pressure from end-users, has agreed to exempt these models from new occupant safety and carbon dioxide emissions standards for a further six years.
The company produced just over 14,000 Labo and Damas vehicles last year, with less than 11,000 of these sold domestically. The 800cc, five-speed manual transmission vehicles are popular among local traders due to their small dimension, low cost and ease of use.
GM Korea has spent KRW19m (US$18.8m) on new production facilities in the last year at the Changwon plant which has the capacity to produce 230,000 vehicles and 580,000 engines per year. The main product there is the Spark minicar.
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By GlobalData
