General Motors plans to invest $7.3 billion (8 trillion won) in its South Korean unit over the next five years to improve engineering and production abilities, underlining South Korea’s importance as a key manufacturing and development center.
“GM Korea will continue to play a major role in our global growth plans,” said head of GM International Operations (GMIO) Tim Lee in a statement.
General Motors currently operates five manufacturing facilities in South Korea which mostly supply Chevrolet vehicles to the local market, as well as to Europe and other regions, accounting for about a quarter of Chevrolet’s global production. The unit also contains design and engineering operations that were responsible for developing the Spark city car, Aveo/Sonic subcompact sedan and hatch, Trax subcompact crossover, Cruze compact sedan, wagon, and hatch, as well as the mid-size Captiva crossover.
At that, GM Korea will continue with its plan to double the size of its design center at its headquarters in Incheon by the end of 2013, making it GM’s third biggest after the U.S. and Brazil.
GM’s confirmation of the investment assuages concerns that the automaker would reduce its presence in the country. The worries surfaced when GM Korea said in late 2012 that it would not be responsible for building the next-generation D2XX-based Chevrolet Cruze. Fears grew further after GM was rumored to be interested in gaining full control of GM Korea by purchasing a 17 percent stake from the unit’s second-biggest shareholder — a move that was seen as a possible step to restructure the unit.
General Motors, which markets Chevrolet vehicles in Korea as of the beginning of 2011, is the third-biggest automaker in South Korea behind Hyundai and Kia. In the short- and long-term, it aims to increase its market share to 20 percent.
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By this announcement, GM “assuages concerns that the automaker would reduce its presence in the country” while continuing to wind down production in Europe, and refusing to move the production of Opel and Vauxhall branded vehicles from Korea to European Opel/Vauxhall factories.
Bitter news for workers in Germany, who are faced with unemployment because of this shift.
BTW, Chevrolet Deutschland GmbH is a wholly owned subsidiary of GM Korea, formerly of GM Daewoo Auto & Technology.
BTW 2: GM did not commence to produce Chevrolet vehicles in Korea in the year 2011, but 2004. The simply relabeled the e.g. Daewoo Matiz as a Chevrolet Matiz, the Daewoo Nubira as Chevrolet Nubira etc etc.
“BTW 2: GM did not commence to produce Chevrolet vehicles in Korea in the year 2011, but 2004. The simply relabeled the e.g. Daewoo Matiz as a Chevrolet Matiz, the Daewoo Nubira as Chevrolet Nubira etc etc.”
And selling rebadged and uncompetitive Daewoos as Chevrolets in Europe is one of the biggest reasons that Chevy is in its current position in the region today… the decision cost them dearly, and they still recovering from the image of making subpar, unstylish, and for all intents and purposes shitty cars thanks to the move.
Also, the 2011 date in the article points out when the Chevrolet brand was introduced to Korea, thereby replacing the Daewoo brand.
Well, fact is that GM took over Daewoo Motors, and could use the existing Daewoo dealer network and customer base by renaming Daewoo to Chevrolet. So the Chevrolet brand could start with sales beyond the dealers of exotic cars, where the US Chevrolet models are offered.
Adn all the smaller Chevrolet models from the Captiva and Cruze downwards come from Korea, not North America.
So — it is a mixed bag.
You’re right, the dealer network is another benefit. The problem, it would seem, is that GM was late in “organically” entering some international markets (like Korea), so it had to buy its way in there.
On the other hand, the Korean arm — which is helped by GM’s other global outfits in design and development — does a great job on the recent vehicles it has been engineering. For instance, the Cruze, Sonic/Aveo, and Trax — all great vehicles.
Strange — I think I had seen the info about the massive investment in Korea on the global GM Media website, but can’t find it any more.
I get the impression, that GM has taken the item down in order to keep this hidden for the Opel workers who negotiate this week again to avoid the closure of the Opel plant in Bochum, which Opel announced for 2016, and what Steven Girsky threatens to advance to 2014, should the workers not bow to the company’s threats.
BTW, yes I noted my error on confusing Chevrolet branding in Korea since 2011 instead of 2004.
I also noticed that the presser was no longer available. Strange…
Thank you for confirming my impression as fact.
I found the story on Automotive News Europe, in form of a Reuters news story:
>
This article says something more about GM Korea and Opel:
>>
Those worries intensified after GM Korea said late last year it would not build its next-generation Chevrolet Cruze in South Korea, raising the possibility that it might shift assembly to Europe to help boost efficiency at its money-losing Opel unit. The new model is due in the third quarter.
GM CEO Dan Akerson has previously floated the idea that more cost-cutting at the company’s Germany-based Opel unit could be accompanied by shifting production to the region from Asia to make European plants more efficient.
Oops, some parts of my contribution vanished, probably because there were angled brackets in the text…
This one seems to be important to me:
The article reminded the reader that GM does not own 100% of GM Korea, but only 77% (or nearly 77%), and that the next-largest shareholder, the Korean Development Bank has veto rights against decisions of the majority shareholder GM Company.
And that GM Korea “accounts for about a quarter of GM’s Chevy production globally”.
GM is clearly investing where it should, Koreas strong education and balanced economy favor investment to compete within an incredibly strong economy in South Korea. Hyundai is raising the competitive bar no reason why GM should not invest heavily in Korea… This will have major impact on GM’s global success… GM investing in its growth markets Korea and Brazil makes so much sense….
I originally thought & still do the Chevrolet Matiz was an insult to past Chevys (Chevelle, Malibu, El Camino etc) mind Matiz buyers ain’t interested in all that heratage of muscle.
The Matiz, at the time, worked for whatever vauge sales plan GMEurope had in play. Now, it’s best to forget it.
But that leads to the next problem, Chevy’s image abroad. It can conjure up things like the El Camino and the Chevelle, but like the Matiz, they only worked at the time.
Reviving the Chevelle nameplate and putting it onto a GMKorea sourced car isn’t going to undo all of GMEurope’s problems overnight. Past Chevy’s, as glorified and storied as they were, simply wouldn’t cut it in todays world. Gas it too exensive and there isn’t as much hooning anymore. A nameplate wouldn’t do much as less than a handful of people in Europe would know what a Chevrolet Chevelle was and what it ment.
Then there is the problem of brand preception…and how big a mountain that is to climb. Even in NA, the stigma of poor reliablity persists and that too is not something that can be ignored with a historical nameplate being reintroduced.
You are right about this Chevelle, Grawdaddy — I do not have the slightest idea about what that might have been.
But don’t you also think, that GM is living today because of the cars and platforms developed in Europe and Korea, which are real world cars, being sold and sellable on all continents? From Spark and Adam over Cruze and Verano up to Malibu, Regal and Lacrosse?
Those floating US-American cruise ships on wheels were good for people who wanted puttin’ on the Ritz, but not for everyday use to get from A to B.
My not very humble opinion.
“But don’t you also think, that GM is living today because of the cars and platforms developed in Europe and Korea, which are real world cars, being sold and sellable on all continents?”
In part yes. Althought their chief source of income is from their trucks: the GMT range, primarily sold in North America. This range of product alone, I feel, is what is keeping GM afloat.
If there is nothing but dead weight at the top of GM, they’ll ride the truck market in NA for every last dollar until they get outsold by Nissan (highly unlikely), gas becomes too expensive (likely), or they simply can’t make a compeditive product in the eyes of the consumer (re: next gen F-150).
However…
…you’re 100% right about the platforms developed outside of GMNA. Such platfroms have greater appeal to the masses as a whole. It’s something that someday will have to be brought to the forefront of GM’s attention; they have to have a working and solid contingency plan that isn’t based on the GMT range. That might very well be the primary source of income in 10 years from now. If GM never bothers to wrangle with the demand of cars at home and abroad, they’ll continue to be unfairly preceved as a ‘truck company’.
As for the “cruise ship”, the last one died out with the Ford Crown Victoria…and even then that car was woefully uncompeditive. The only advantage Ford had was the Panter platform; it was over 30 years old, all the tooling and engineering had paid for itself, and Ford could always sell them for less than whatever barge GM or Mopar made, no matter how well built.
Thankfully, the barges are gone for good. The closest car GMNA offers to the barges are the LWB Episilon Impala and XTS; and even those 2 aren’t as big as the Crown Vic was. At least they’re better built and don’t handle like barges.
At least the last Daewoo Matiz was a very good looking small car. None of the Chevrolets which later came from South Korean could compete with this.
But that’s Chevrolet… the muscle cars are rather GMC, aren’t they? Those cars trading in “Exotic Cars” shops.
“None of the Chevrolets which later came from South Korean could compete with this”
How about new Spark, new Aveo/Sonic, Cruze, Trax? I think those are worlds better than the original Matiz, don’t you?
I was speaking about the looks of the Matiz. I can’t say anything about the technical qualities for lack of personal experience and also for lack of having cared about any public tests of those cars.
The Matiz (the latest incarnation of it) looked very much like the original Renault Twingo, which was one of the best looking cars still populating our roads.
All the following Korean Chevrolets just look like ordinary tin boxes, nothing special about them. But, if you like, many of the latest Opels are worse. I hate those belt lines rising up from head to tail, and the windows narrowing until becoming mere observation slits. Not my piece of cake.
Again, beauty lies in the eyes of the beholder.
Sorry, I forgot to add that, of course, beauty lies in the eyes of the beholder.
As long as we don’t see any more daewoos rebadged as Chevys then I think this is a smart move.
Luckily, Daewoo doesn’t exist anymore… so that’s no longer a possibility 🙂
The Matiz was originally designed to be a Fiat but in the end it was a Daewoo. It was the first Daewoo not to be based on a 1980’s Vauxhall (Mk2 Astra & Cavalier) later Daewoo bought up Ssangyong & sold 4×4’s as Daewoo before becoming Chevrolet.
The new ones are a lot better, I’m not against Korea – it’s the quality it has to be a decent product & not just slapping badges on an old SUV, I know an old SUV will make loads of ££ & $$ (cheap to make & sell expensive) but the long term damage costs are far greater than the initial quick £ & $.
Maybe GM Korea could take a part of those 7.3 tousand million USD to buy the automobile plant in Bochum, Germany, from their sister company Adam Opel AG and start manufacturing Chevrolet vehicles there.
This would save a lot of logistics costs for transporting the finished vehicles from South Korea to Europe.