General Motor’s looming shutdown of local manufacturing in Australia, scheduled for 2017, could open the way for GM Korea to pick up production of vehicles now made in Australia to reduce costs and increase sales reach to ASEAN. This means, the infamous Holden name plate could be continued with production in Korea for the ASEAN region. Holden cars could start being re-introduced back in Malaysia and neighboring countries with design still being done in Australia.
Korean output accounted for 20% of GM’s global sales last year. For Chevrolet alone, GM Korea produced nearly 34% of the brand’s worldwide volume last year. Rocha wants to keep Korea’s contributions near the same level, even without Europe. As part of the plan, GM secured production of the next-generation Cruze compact car. That vehicle will enter production at GM’s Gunsan plant in late 2016 for local and export markets.
The Cruze will help GM Korea boost factory utilization rates, but the future is far from rosy. GM Korea still will be playing catch-up on its lost European volume. And other factors, including high labor costs, will put the squeeze on long-term prospects for local production. Still up in the air is whether GM Korea will keep making the Chevrolet Sonic, sold as the Aveo in some markets, when the next generation is introduced. GM Korea aims to help its own cause by selling more cars locally.
GM’s sales in South Korea have risen for three straight years, advancing 10% to 155,000 vehicles in 2014 from 141,000 vehicles in 2011. Market share was 9.3% last year.
Locally built Chevys make up most of that. Chevrolet is the third-biggest brand in South Korea behind Hyundai and Kia, but the tally also includes a relative newcomer: Cadillac. Sales at the luxury marque, which imports its vehicles from the U.S., rose 68% to 504 units in 2014 over the previous year.
GM Korea expects a big boost this year from 10 product unveilings, including completely new nameplates, face-lifts and new powertrain options. It starts with the overhauled Spark, which enters production here in the second half for global markets, including the U.S.
