GM Korea’s Gunsan Plant Emerging as First Asset of GM to be Sold

GM is expected to dispose of the Gunsan Plant of GM Korea as one of the veto rights of the Korea Development Bank, which has 17.02% of GM Korea, expired on October 16 and GM now can dispose of more than 20% of the total assets of GM Korea at will.

Put into operation two decades ago, the Gunsan Plant of GM Korea has an annual production capacity of 270,000 vehicles along with an area of 1,290,000 square meters. The plant, however, is currently underutilized with GM having withdrawn from the European market and the automobile sales in South Korea remaining sluggish. Specifically, its current capacity utilization is approximately 20%.

Things are unlikely to get better in the future. The plant is currently producing the Orlando MPV along with the Cruze sedan. The former is scheduled to be discontinued sooner or later and the latter, which made its debut in South Korea about six months ago, has failed to gain popularity all the way since it was launched.

Besides, GM’s manufacturing facilities in the United States and China are currently producing the Cruze sedan as well. Moreover, GM Korea is planning to import the Equinox SUV, instead of assembling it in Gunsan, in order to expedite the launching of the SUV in the South Korean market.