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Report: GM plans to build next-gen Astra in Mexico

 
6 2,137 views Sep 15, 2008
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Success in business is often about taking educated risks, and even the best players in the game don’t always get it right. General Motors’ decision to import the Opel Astra to the United States as a Saturn-badged car, made before oil prices sky-rocketed and currency rates went out of favor for the U.S. dollar, was a calculated gamble that’s now hurting profitability and sales.

The problem lies in the car’s cost. At the targeted $15,500 price point, the Astra would likely have seen strong sales, according to Bob Lutz, GM’s vice chairman and head of product planning. But since the dollar lost strength against the euro over the course of 2007 and 2008, the price of the Astra has risen from its initial $15,995 price to $16,495 - almost $1,000 or 6.4% above the target price.

In order to avoid the same pitfalls of importing cars into the U.S. and losing out because of the weak dollar, GM is planning on building the next-generation of the car in San Luis Potosi, Mexico, according to Automotive News. Building the Astra in Mexico should reduce production costs as well as well as the associated costs of shipping the vehicle across the Atlantic (the current model is sourced from Belgium).

Ford will do the same with its all-new Fiesta compact, which will also be built in Mexico but will arrive one year before the expected arrival of the new Astra sometime in 2011.



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Comments (6)

  1. By Laz Posted: 9/8/2008 4:57pm PDT

    Another example of how desperate GM is! I'm starting to feel sad for GM...
     
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  2. By NoNameDenton Posted: 9/8/2008 7:32pm PDT

    They should move production to the United States sooner.
     
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  3. By Don Posted: 9/8/2008 7:57pm PDT

    They can't get anything right.
     
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  4. By io Posted: 9/8/2008 9:58pm PDT

    they cannot expect strong sales without offering astra sedan. americans don't like small hatchbacks, like the west europeans don't like sedans
     
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  5. By NaBUru38 Posted: 9/15/2008 1:44pm PDT

    This is bad news for the Brazilian division of General Motors. They're missing the Aveo, now the Astra... What models will remain for production there?
     
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  6. By NoNameDenton Posted: 9/15/2008 3:49pm PDT

    Might be even cheaper then the plan to build it at the Spring Hill, TN idea.
     
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