GM to invest billions in major expansion in Asia

A day after announcing a $4.2 billion investment in Europe to develop and build the next-generation Astra and sister models, General Motors executives said the company also plans to invest billions of dollars in Asia over the next two years, in part to build a new family of subcompact vehicles.

GM said it will spend $3.2 billion in Korea, where affiliate GM Daewoo is engineering replacements for the Chevrolet Aveo, Daewoo Gentra, Opel Corsa and other future products to be based on the next-generation Gamma platform.

[Source: Inside Line: Edmunds]

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The first of the new Gamma2 models are slated to go into production in late 2009 and early 2010. The Gamma family will be produced at various GM plants around the globe, including China, India and Korea, as well as Central Europe and Latin America.

The GM investment includes funding for a new Korea R&D center and development of a diesel engine and six-speed transmission.

In India, GM chairman Rick Wagoner suggested the automaker may use that country as a future small-car export base. GM is doubling its local capacity there to 225,000 units, making India the company's third-largest Asian production base, after China and Korea. Wagoner said he expects that India in 10 years will become the world's second-largest vehicle market, after China.

Meanwhile in China, GM executives said the company expects to double its production capacity by 2010, to 1.7 million units a year.

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