Geographically speaking, South Korea looks well-positioned to import vehicles from China, rather than the U.S. What’s more, GM China has a slew of ultra-modern factories in China, and the brand has enjoyed a good deal of success in the Chinese market over the past decade. Why then does South Korea import its GM vehicles from the U.S. instead? To find out, we asked the former VP of Sales, Service, and Marketing at GM Korea, Dale Sullivan. Here’s what he had to say.
In an interview with GM Authority Executive Editor Alex Luft, Sullivan explained that the reasoning is multifaceted. The most obvious justification is the hefty eight-percent import tariff placed on vehicles imported from China. With that tariff in place, the business cost structure changes, making it much less worthwhile to import from China. By comparison, the free trade deal between the U.S. and South Korea means it makes much more sense to bring over U.S.-built vehicles, rather than vehicles produced by GM China.
But there’s more to it than that, as Sullivan points out that consumers in South Korea generally prefer vehicles assembled in the U.S. over a product assembled in China. Sullivan said that Koreans have a fondness for American luxury products, but that a GM China product would simply not be as well-received as a product built stateside.
However, that may change in the future. “What could help the situation in the future are electric vehicles,” Sullivan said. With China’s renewed focus on EVs, a number of new EV products will be built there, including by GM China. When that happens, Chinese-built vehicles may be exported to South Korea.
To note, GM Korea also builds several Chevy models in Korea for sale in the Korean market, including:
Whether GM China will play a role in supplying vehicles to the South Korean market in the future remains to be seen.
This post was created in collaboration with our sister publication, Cadillac Society.