Analysts’ warnings of the wide disparity in wages between Korea and India are realized as General Motors taps its Indian subsidiary to build the Chevrolet Spark for export to Mexico.
GM Korea last year exported 31,059 Sparks to Mexico but currently is shipping none. A GM spokesman tells WardsAuto the Korean operation will resume building the Spark for export to Mexico later this year to meet growing demand for the minicar, but volumes and a timeframe for the production run are not clear.
Winning the lion’s share of Spark production underscores GM India’s growing role as an export hub for its U.S.-based parent. Union officials in Korea have shared analysts’ concerns that high labor costs there could prompt automakers such as GM to move production elsewhere. GM India also has more unused plant capacity.
GM India’s first left-hand-drive Spark built for export to Mexico was assembled at its Talegaon plant, which also produces a right-drive version called the Chevrolet Beat for the Indian market. Exports of the India-built Spark began in September 2014 with a shipment of 1,000 units to Chile. Arvind Saxena, GM India’s president and managing director, says Mexico will raise that number to 20,000 through year’s end.
As part of GM’s strategy for India it is closing its underutilized Halol plant, where labor unrest has been chronic, and consolidating assembly operations in the Talegaon facility near Pune in west-central India. Annual capacity of 130,000 vehicles will be boosted to 220,000 by 2025, with exports playing a major role.
The Spark is built at GM Korea’s Changwon complex, which also produces the Spark electric vehicle and 0.8L, 1.0L and 1.2L engines and transmissions. GM resumed production of the Damas minivan and Labo mini-truck at the plant in November.
In January-June, the Spark’s 101,005 global deliveries accounted for 33% of GM Korea’s global sales volume of 307,889. The minicar’s 75,010 export sales represented 32% of all 236,522 CBU vehicles sold by GM Korea outside the country.
