General Motors will build the next-generation Chevrolet Cruze in Mexico, the company announced on Monday. The automaker will invest $350 million to build the Cruze at the Coahuila facility, as part of a $5 billion investment in its Mexican plants announced in 2014.
Building the Cruze in Mexico makes economic sense as the country has low labor costs and free trade aggreements. However, the compact sedan will continue to be built in Lordstown, Ohio, as well. The model will also be assembled in China.
According to a GM spokeswoman cited by Reuters, the production of the Cruze in Mexico will be mainly for the local market. The Cruze is currently imported to Mexico from GM’s assembly plant in South Korea.
GM sold 7,870 Cruze models in Mexico last year, down nearly 15 percent from the year before, according to data from the Mexican Association of Automobile Distributors and the Mexican Automotive Industry Association.
The current-generation Cruze will continue to be manufactured in South Korea as well for domestic and export markets. GM also agreed to build the next-generation model in South Korea from 2017 as part of a new wage deal last summer.
Mexico is a hot spot for automotive manufacturing thanks to its low wages and access to the US market. Toyota is said to be finalizing plans for its first passenger car assembly plant in Mexico, while VW recently announced a $1 billion investment in its Puebla plant.
Note: Chinese-spec next-generation Chevrolet Cruze pictured