Thursday August 21, 09:46 PM
GM invests 500 mln in new small car for US market
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CHICAGO (AFP) - General Motors (NYSE: GM - news) announced plans Thursday to invest more than 500 million dollars to build a new compact car in the United States.
The Chevy Cruze will be unveiled at the upcoming Paris Motor Show and will first be sold in Europe and Asia. It will hit the US market in 2010.
The Cruze is the first of a new family of compact cars GM is launching as high fuel prices have increased demand for more efficient vehicles.
GM said the same vehicle platform will be used at plants in the US, Asia and Europe and that the car "epitomizes the global nature of the automobile industry."
"The Chevrolet Cruze was designed and engineered by our global teams in Europe and Asia Pacific and will be manufactured in those regions in addition to the assembly plant here in Lordstown, Ohio," said GM chairman and chief executive officer Rick Wagoner.
"Our goal for the Chevrolet Cruze is to lead in fuel economy in this very competitive car segment."
The investment comes as GM accelerates a years-long restructuring program in the face of steady loss of market share to Asian competitors and massive financial losses.
GM, which has shuttered scores of plants and laid off tens of thousands of workers, said it has invested more than 20 billion dollars in its US operations in the past five years.
GM's US market share fell to 20.4 percent in July from 23.9 percent a year earlier while its sales were down 17.5 percent in the first eight months of the year, according to Autodata.
US auto sales were down 10.5 percent in the first eight months of 2008 amid a weakening economy and tight credit market.
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