FRANKFURT (Reuters) - General Motors will build a sports utility vehicle (SUV) at the Opel factory in Ruesselsheim, Germany, and invest 500 million euros (399 million pounds) in engine production in Europe, Chief Executive Mary Barra said on Thursday.
"This SUV will become a second flagship next to the Insignia," Barra said in a statement, referring to the Opel brand's flagship Sedan.
The pledge forms part of a commitment GM announced in 2013, to invest 4 billion euros in Germany and Europe by 2016 to overhaul Opel's aging product range with 23 new products and 13 new engines.
In February, Opel signed a collective labour agreement with employees at its German factories in Ruesselsheim, Kaiserslautern and Eisenach, in an accord that includes a job protection guarantee until 2018.
Opel - whose UK sister brand is Vauxhall - employs around 3,300 employees at the Ruesselsheim plant, where the Insignia and Astra models are built.
The company said it would invest the 500 million euros in engine production at Opel factories in Kaiserslautern and Ruesselsheim as well as the GM powertrain plant in Tychy, Poland.
It's official: Vauxhall a large SUV to arrive in 2020
Vauxhall/Opel confirms plans for a new SUV model as part of a 27-strong product offensive
Vauxhall has confirmed it intends to build a large SUV and it’ll be on sale by 2020.
Just like Auto Express exclusively revealed last month, the GM-owned brand intends to add a trio of high-riding models to steal market share from key rivals - one of which is a large SUV. Others include replacements for the Meriva and Zafira MPVs.
Mary Barra, Chief Executive Officer of General Motors, said that the flagship model will be produced at Opel’s headquarters in Russelsheim by 2020. Some 245 million euro will be invested in the plant to build the car, while additional investments of more than half a billion euros in the engine and transmission plants in Russelsheim, Kaiserslautern and Tychy (Poland).
The three new cars will be part of a 27-strong product offensive by Opel/Vauxhall which also includes 17 new engines.
Barra said: “Opel/Vauxhall is of high strategic importance for GM. The product offensive with 27 new models and 17 new engines has enjoyed a very successful start. These additional investments will help the brands shine again and further strengthen our position in Europe. They are a clear sign of GM’s commitment to Opel/Vauxhall, to Germany and to Europe.”
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