GM dumps Korea as source for 2017 Holden Commodore

THE same factor that pushed General Motors to quit building the Holden Commodore in Australia – the high cost of labour – appears to have led it to dump a decision to build the first-ever fully imported Holden Commodore in Korea.

The Wall Street Journal reported overnight that plans to build a Chevrolet-badged version of the Opel Insignia hatchback in South Korea had been shelved due to “high costs and market shifts”. The Insignia is the car that will carry the Commodore badge after Australian Commodore production ends in late 2017.

The move away from building the Chevrolet Impala in Korea is potentially an important one for Holden, which is making a pitch to add a more premium edge to its showroom after years of relying on cheap South-East Asian-sourced products to fill its portfolio.

It also opens the door to the all-new Commodore potentially being made at GM's Hamtramck assembly plant in Detroit, and taking advantage of the free trade agreement that exists between the US and Australia that removes all tariffs on vehicles arriving from the US. A similar agreement is in place with South Korea

The move also points to Rüsselsheim in Germany as a potential source of Holden Commodore-badged Insignias arriving in Australia.

GM has struggled with its Korean car-making division, where unions have helped to push production line workers’ salaries up by more than 50 percent over the last five years, the Journal reports.

The country recently lost a bid to take up Australia’s production allocation of the Holden Cruze, worth about 15,000 units a year, once local production ends in October this year. Instead of building GM's next-generation Cruze, it will continue to build the old one for developing markets.

Holden, meanwhile, will import the Opel Astra hatchback as a replacement for the locally made Cruze hatchback, with just the Cruze sedan expected to remain on sale to help fill fleet and rental car company orders.

The Detroit-Hamtramck assembly plant, where the Chevrolet Impala-badged version of the Insignia is built, currently builds the second-generation Chevrolet Volt that was not engineered in right-hand drive. It also builds the Chevrolet-badged version of the Malibu, with Australia’s Holden-badged version of the car sourced from South Korea.

Opel’s Russelsheim plant is also slated to soon start production of an new SUV that is expected to sit above the smaller Opel Mokka – a Korean-built version of the Mocca is sold here as the Holden Trax. The new mid-size SUV is expected to take its inspiration from the Monza concept shown at the Frankfurt motor show in 2013.