General Motors Co. plans to shorten a summer shutdown at its factory in the city of San Luis Potosi to five weeks from seven thanks to better-than-expected demand, a company official said Friday.

The plant, which produces the compact Chevrolet Aveo and Pontiac G3 and has been idle since the beginning of this month, will resume operations Aug. 10, said Mauricio Kuri, head of communications for General Motors de Mexico, in a press conference.

"This is good news," Kuri said. "Conditions have improved for the orders placed at San Luis Potosi."

Kuri also said that GM's pickup truck factory in the city of Silao in central Mexico will resume operations Monday after an eight-week work stoppage that began in May.

He said the recently passed "Cash for Clunkers" legislation in the U.S. - which gives car buyers up to $4,500 to trade in aged gas-guzzlers for new cars and trucks - could boost exports from GM's factories in Mexico.

GM de Mexico's inventories are "very healthy," as the company has a 45-day supply of vehicles on hand, Kuri added.

Speaking at the same event, GM de Mexico President Grace Lieblein said the auto maker plans to reduce its non-unionized work force by around 300 people in coming weeks.

"As in the U.S., we need to reduce employment," she said, adding that the company will have roughly 3,000 non-unionized workers after the job cuts.

Kuri said GM de Mexico employs a total of about 12,000 people.

Mexico's auto industry has been devastated this year by a plunge in new vehicle demand in the U.S., which is mired in a deep recession. Mexico's auto production from January to May fell 42% on the year to 500,383 vehicles, while exports sank 41% to 399,755.

There are early signs that demand could turn around in coming months, however, as U.S. new-car sales in June fell by 28%, their smallest drop this year.

Officials at GM de Mexico, which produced 39% fewer cars in the first five months of 2009 than in the year-ago period, have said they expect output to improve in the second half of the year.

Lieblein said GM de Mexico currently has no more work stoppages scheduled at its factories this year.

The Mexican Automotive Industry Association, or AMIA, is scheduled to release June's production, sales and export data Monday.

-By Paul Kiernan, Dow Jones Newswires; (5255) 5001-5726, paul.kiernan@dowjones.com