Small-business favorites coming back

GM Korea, the nation’s third-largest carmaker, will resume production of its mini commercial vehicles starting next month at the request of small-business owners.

The Korean unit of U.S. automaker General Motors said Monday it has finished setting up an assembly line for Damas and Labo models at its Changwon plant and is preparing for test production with the goal of delivering vehicles starting in mid-August.

Since their introduction in 1991, the two models have been popular with small business owners as their compact size allows them to navigate narrow streets and fit into small parking spaces. They are especially loved by those who work in delivery and food sellers.

Their 800cc engines also qualified them for the same benefits as a citycar, while using liquefied petroleum gas (LPG) reduced maintenance costs. Accumulated sales of the two models surpassed 300,000 units.

GM Korea discontinued production of the Damas and Labo late last year and ended sales in April because it said it was too costly to upgrade the vehicles to meet revised safety and emission standards.

However, the decision prompted small business owners to petition the company and government to continue production of the Damas and Labo. As a result, the government earlier this year announced it would waive safety and environmental regulations for as long as six years.

The company plans to produce 1,000 to 1,500 units per month. The Damas mini commercial van sold 10,969 units last year, while the Labo mini truck sold 9,693 units.

However, it is expected that the price of these models will go up slightly as the automaker invested in facilities and new equipment like a speed limiting system, on-board emission diagnostics system and tire pressure monitoring system that was required during the grace period.

Previously, Damas sold for 9 million won ($8,900) to 9.2 million won, while the Labo cost 7.4 million won to 8.2 million won.

BY joo kyung-don [kjoo@joongang.co.kr]