General Motors Aims To Raise South Korean Sales By 20 Percent
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General Motors is looking to increase sales of its vehicles in South Korea by one fifth and attain a market share of over 10 percent as it tries to revitalize production output in the country.
The Problem
South Korea is one of GM’s key production bases in Asia. For years, it has served as a low-cost export hub of Chevrolet vehicles, with the majority of European-market Chevys produced there. But after GM’s 2013 decision to cease selling Chevrolets in Europe’s mainstream vehicle segments, two of GM’s four South Korean plants are now facing low utilization. Meanwhile, labor costs have risen by nearly half in just five years, resulting in diminished manufacturing competitiveness.
According to a Reuters report, combined domestic and export sales for the unit fell 30 percent over the last two years to 1.4 million vehicles in 2015. GM Korea held a market share of 8.6 percent last year; the last time it achieved a market share of over 10 percent was in 2007.
The Solution
To return some of the utilization rate at its plants, the unit aims to boost domestic sales to 191,000 vehicles in 2016. It plans to reach that goal by introducing seven new models, including the freshened Captiva SUV and the all-new Malibu midsize sedan.
The unit plans to add the new Malibu to increase output at its Bupyeong plant, while considering producing the Chevrolet Impala there as well. The local labor union is pushing for the move, as the full-size Impala — which went on sale in Korea in 2015 — is currently produced at GM’s Detroit-Hamtramck plant and exported to Korea.
“The decision is a very important and difficult one,” said GM Korea CEO James Kim regarding producing the Impala locally in the country.
Another part of GM’s plan is to increase output at its factory in the city of Gunsan while maintaining exports from South Korea 2016 at similar levels as those in 2015.
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