Domestic Production to Be Reduced
According to industry sources, GM Korea is likely to increase imports from the United States and reduce its domestic production volume to a large extent after Gunsan Plant shutdown and KORUS FTA revision.
GM International President Barry Engle had a meeting with unionized GM Korea workers on March 27, urging them to reach an agreement with the management. “The South Korean government is calling for us to come up with a self-help plan by April 20, but no self-help plan can be prepared by then unless an agreement is reached by the end of this month,” he said, adding, “Then, we cannot anticipate any support from the South Korean government or the Korea Development Bank, and then the company may go under.” GM is going to release the Equinox in South Korea in May if the workers and the management meet halfway.
Last year, GM Korea imported 6,197 cars from the headquarters, which is divided into 4,189 Chevrolet and 2,008 Cadillac cars. This means the company can import more than 40,000 Equinoxes if the vehicle complies with U.S. safety standards. Under the new KORUS FTA, each U.S. automaker can export up to 50,000 cars a year to South Korea, regardless of South Korea’s vehicle safety standards, if it meets those of the U.S.
The All New Cruze is likely to be imported from the United States or Mexico after Gunsan Plant shutdown scheduled for May. The former is more likely given that it is tariff-free according to the revised KORUS FTA. The import volume of the Chevrolet Bolt EV is expected to increase as well although it stood at 60 in 2017. This year, the GM headquarters earmarked approximately 5,000 Bolt EVs for GM Korea and they were sold out during the presale in January.