11/29/2006

GM confirms to build Chevys in Poland next year

General Motors will start production of a Chevrolet small four-door saloon in the latter part of next year at a plant in Warsaw, Poland, that is owned by Ukrainian partner UkrAvto, GM said on Tuesday.

The company's comments confirmed what a source close to the matter told Reuters on Monday.

The U.S. carmaker said it plans to build upwards of 60,000 Chevy Aveos -- also called the Kalos in some markets -- in its first full year and expects to eventually ramp up production to over 150,000 once two additional hatchback versions are added in mid-2008.

The move will help alleviate bottlenecks in the Aveo's current plant in South Korea, allowing it to divert additional volumes to the Asian and U.S. markets.

t would also shorten delivery times of Korean-built Chevys to Europe while reducing logistics costs and lowering foreign exchange risks.

"Assembly in Europe will help ensure the continued growth of the Chevrolet brand in Europe and give (South Korean unit) GM Daewoo much needed manufacturing flexibility to meet the strong global demand for its most popular vehicle," GM Daewoo Chief Executive Michael Grimaldi said in a statement.

Chevy sales in Europe are expected to surpass 300,000 units this year versus 190,000 in 2004, the company said.

A source familiar with the matter told Reuters on Monday that an announcement on building the entry-model Chevys in Poland was imminent.

GM and UkrAvto have been in talks for months about forming a joint venture to make Chevrolets in Poland, but decided the Warsaw assembly plant will make Chevrolet small cars under contract for the time being, the source said.

The world's largest carmaker by volume, GM already cooperates with UkrAvto to make Chevrolets in Ukraine, so building up capacity in Poland was seen as a logical way to beef up European production of the brand rather than rely on imports.

Source:today.reuters.com



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