General Motors Pledges $7.3 Billion Investment in Korean Operations
Highlighting Asia’s strategic importance in the global automotive business, General Motors has pledged a $7.3 billion investment in its South Korean operations over the next five years. This follows an announcement earlier in 2012 in which GM announced an expansion of its Incheon design center in the country, reports Reuters.
GM’s previous announcement that it was seeking to gain full control of GM Korea by buying the remaining 17 percent share, as well as the announcement that the next-generation global Cruze compact would not be built in Korea raised concerns that the company was planning on either major restructuring of its Korean operations, or transferring some of the current roles and responsibilities of the operation elsewhere.
GM Korea has played a key role in the development of a number of GM’s newer passenger car models, including the Chevrolet Malibu, Chevrolet Sonic, Chevrolet Spark, Cruze, and the Chevrolet Trax small crossover, a version of which is sold in the U.S. as the Buick Encore. The U.S. market Chevrolet Spark, and Buick Encore are both built in Korea.
Although the Korean domestic car market remains relatively small compared to such markets as China, Brazil, India and Russia, Korea remains an important production base for GM, with five plants. GM’s goal is to increase its market share in the Korean market to 20 percent. Corporate twins Hyundai and Kia dominate the Korean domestic car market.