General Motors will soon move to decrease its dependence on South Korean production, a top industry researcher has predicted.
Currently, a fifth of GM’s global production comes from South Korean, but the automaker will likely pare back its output in the country by 20 percent in 2015, according to IHS Automotive.
“GM Korea’s volume decline is seen as inevitable,” IHS senior production analyst Ian Park told Automotive News.
Escalating labor costs and tensions with a strike-prone South Korean workforce have sparked rumors that GM could one day end vehicle assembly in the country altogether. The automaker has already announced plans to shift Chevrolet Cruze output out of South Korea, and it has shown signs of doing the same with the Spark/Aveo.
Slow sales in Europe have also forced GM to cut planned output at its plant in Gunsan, South Korea, to 147,000 vehicles next year, far below its 260,000-unit capacity.
GM’s presence in South Korea began when it purchased troubled Daewoo Motors in 2002. Subsequently renamed GM Korea, the division eventually grew into not only a significant production base for GM, but also a major engineering and styling resource as well.
For its part, GM has declined to comment on the IHS forecast.
“We don’t discuss future production plans in public due to competitive reasons,” said GM spokesman Park Hae-ho.
Leave a Reply