GM still remains committed to Korea, why?
Monthly sales fall short of 9,000, worst in 6 years
GM Korea shows no signs of rebounding. The U.S. carmaker’s Korean affiliate sold 8,991 cars last month here to lag behind the nation’s smallest carmaker Ssangyong Motor for the first time.
It was also the first time in almost six years for the carmaker to fail to sell 9,000 cars in one month.
According to GM Korea, Monday, it sold 8,991 cars in Korea last month, down 36.1 percent from the previous year. This compares to its rivals’ surging domestic sales performance.
Experts attribute GM Korea’s struggling performance to the absence of new models. Competitors have launched many new cars in various segments while GM Korea introduced only one new model this year.
Considering GM’s global restructuring, GM Korea’s worsening sales are feared to lead to the departure of the automaker from Korea. The former has carried out a series of withdrawals and operation integrations between regions with weak sales performance.
It integrated its South American operation with the North American one this month. GM also sold off its production plants in Gujarat, India, in March, and then canceled the carmaker’s $1 million plan to expand its production line there in May.
It has de facto withdrawn from the market, and GM Korea President and CEO Kaher Kazem led the carmaker’s exit from India.
Kazem said, however, GM will “never” withdraw its operations from the Korean market during a media conference last month.
“Kazem is an expert on labor issues,” a GM Korea official said.
“We all understand the annual labor disputes have jeopardized GM Korea’s sustainable growth. I believe Kazem will give us a reasonable solution for the problem.”
The militant trade union of GM Korea continued to press the company to make more concessions despite its snowballing losses — the Incheon-based carmaker chalked up about 2 trillion won over the past three years.
For example, the union conducts walkouts, although not general strikes, asking for generous bonuses.
Despite warnings the movements may prompt GM Korea to leave the country, the union appears not to be listening.
On a more negative note, GM Korea can now leave Korea without any constraints.
Previously, the firm had to get the nod from Korea Development Bank, which is its second-largest shareholder, to stop its operation here.
But that hurdle expired Monday. This prompts observers to predict GM Korea may take drastic mea- sures soon.
Will new models save GM Korea?
GM Korea also said it will overcome its crisis by releasing a series of new models soon.
The official said GM Korea will introduce the diesel Chevy Cruze in December while importing a larger number of Bolt electric vehicles (EVs).
“GM Korea imported only about 600 Bolt EVs this year, and they all sold out. The model’s popularity was something we didn’t expect, and GM Korea is positively reviewing its plans to massively import the EV model next year. It will be a game changer in the nation’s eco-friendly car market.”