GM Korea Remains A Sour Spot For Automaker, More Restructuring May Come This Year
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General Motors registered a healthy financial performance in 2017, despite one-time charges due to the U.S. tax code changes and the sale of Opel and Vauxhall. However, one sore spot remains on the balance sheet: GM Korea.
WardsAuto reported on Thursday that GM Korea sales fell 26.6 percent in 2017. In January 2018, sales were down 34 percent year-over-year. The worse news surrounds GM Korea’s export business, which dropped 6 percent. Korea has often been a major export hub for the automaker, but many factors have made it less competitive.
On an earnings call, GM Chief Financial Officer Chuck Stevens said the automaker has been in discussions with key stakeholders to remedy the situation in Korea.
“As we strategically access our performance, additional restructuring and rationalization actions may be required. More to come on this topic as we move through the year,” he said.
According to the report, analysts blame uncompetitive pricing for the Chevrolet brand as the main factor behind the brand’s sales tumble.
GM CEO Mary Barra echoed Stevens and said the automaker will look into the business to study the automaker’s ability “to generate the right returns over a long period.”
“The current cost structure has become challenging and we are going to have to take actions going forward to have a viable business,” she added.
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Situation in South Korea is not unlike that of Opel in Germany as South Koreans are just not willing to support GM brand products; something else that South Korea has in common with Germany is that these people are among the cheapest and unwilling to spend money to defend themselves against North Korea and China as they would rather let the United States spend $Billions each year to protect them.
GM has to give the right product against Korean competition ( Hyundai, kia, samsung) to grow in local market. Holden can sell the Orlando and other Korean built cars. Also GM should rebirth Daewoo and sell it globally.