General Motors on Friday renewed its commitment to its Korean operations, pledging to invest 8 trillion won ($7.3 billion) over the coming five years.
The promised money exceeds the total 10 trillion won that the U.S. auto giant has poured into the branch over the past 10 years since the establishment of GM Korea.
“It’s a real story,” Tim Lee, head of GM’s international operations, during a press conference at the Korean unit’s headquarters in Bupyeong, Incheon.
|GM vice president Tim Lee speaks at a news conference at the Korean unit headquarters of GM in Bupyeong, Incheon, on Friday. (Kim Myung-sub/The Korea Herald)|
“GM Korea is part of GM’s success story today. Our Chevrolet and Cadillac brands are here for the long term in Korea, with Korea, for Korea.”
Under a blueprint called “GMK 20XX,” GM Korea plans to elevate its current 9.5 percent market share in Korea to a double-digit range by 2018, while improving its design, engineering and manufacturing capabilities.
According to the GM vice president, the Korean design studio, which oversees GM’s small car engineering and design, will be doubled in size, becoming the third-largest one after those in the U.S. and Brazil.
Six new or redesigned models of GM vehicles, including the all-electric Chevrolet Spark, will be introduced to the Korean market in the second half of this year for manufacturing or development, he said.
The new investment plan came amid growing concerns that the U.S. carmaker could be reducing its presence in Korea.
GM has continued negotiations to regain complete control of its Korean unit by buying back its stakes owned by the second-largest shareholder Korea Development Bank.
The GM executive, however, brushed off such suspicions, saying: “It’s simply a business decision to make use of cash. Do not interpret anything into that transaction other than we want to improve our balance sheet and our capabilities.”
He added that new vehicles would arrive to be produced at the Gunsan plant, North Jeolla Province, relieving labor tensions there after GM recently announced it would no longer build the Chevrolet Cruze in Korea.
While the 8 trillion won investment would offer more opportunities for GM’s sustainable growth in Korea, Lee cited relations with labor unions and the strengthening Korean won as major risks that it is facing here as well.
Over the past 10 years, the company’s car sales have surged more than five times from some 280,000 units in 2002 to 2.05 million last year. Its accumulated car sales have surpassed 15 million vehicles.
The carmaker is now the seventh-largest branch for the Chevrolet brand.
By Lee Ji-yoon (email@example.com