GM’s Opel/Vauxhall division will start assembling the Mokka at its plant in Zaragoza, Spain in the second half of next year. The company said it was in response to high demand for the small SUV in Europe and will help secure 5,800 jobs at the Spanish plant, which currently makes the Corsa and Meriva.
The vehicle is currently made exclusively at the Bupyeong plant in South Korea and the company will be adding capacity at that plant for small SUV production. Initial assembly of the Mokka in Spain will be from complete knockdown (CKD) kits shipped from Bupyeong, but the company said localisation in Spain would be gradually increased.
The CKDs will be shipped in containers to Spain from South Korea, though the company has not yet confirmed volumes, supply routes or with which logistics providers it will be working.
“The decision for Zaragoza follows our company's strategy of building vehicles where we sell them,” said Opel CEO Dr Karl-Thomas Neumann. “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 under utilisation of available production capacity in Europe and therefore is good news for the entire organisation.”
Opel/Vauxhall said the Mokka had been a success since its launch last summer and is “among the three best-selling SUVs in several European markets”.
Opel is investing $80m in the Zaragoza for Mokka production.
“After the recent decision of GM to invest €4 billion ($5.2 billion) in its European operations and an additional commitment to invest €230m in the Development Center in Rüsselsheim, Germany, this is further proof that we are on the right path,” said Neumann.
The Mokka is expected to help improve Opel’s plant capacity utilisation, which was sunk to unprofitable levels as the European market continues to slump.
GM Korea has also seen production disruptions following disputes over wages and working hours with unions in South Korea. According to a note from IHS Automotive, the move could give rise to further discontent among South Korean unions.
“Partial strikes at GM's South Korean plants…have the potential to affect [GM’s] global supply chain as its South Korean operations produce nearly 40% of all Chevrolet vehicles sold globally,” said the IHS analyst.