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.