As COVID-19 Halts GM's US Plant... Korea GM's Domestic Sales and Exports Face 'Emergency'

Concerns Over Supply Disruptions of OEM Shipments Imported from US GM
North American Export Volume, Accounting for 80% of Bupyeong Plant Production, Also at Risk

Korea GM Bupyeong Plant (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] After struggling with the novel coronavirus disease (COVID-19) outbreak originating from China last month, Korea GM is now trembling with fear due to developments from the United States. As its parent company, US-based GM, has decided to shut down its North American plants, concerns are rising that the strategy to boost domestic sales through imported OEM vehicles may face setbacks.

According to local media such as CNBC on the 23rd, GM will halt operations at all North American plants starting from the 30th of this month. Earlier, the United Auto Workers (UAW) union had requested a temporary shutdown of factories in response to the spread of COVID-19. Consequently, the three major US automakers?GM, Ford, and Fiat Chrysler Automobiles (FCA)?agreed to stop factory operations.

With GM’s North American plants coming to a halt, disruptions are expected in the OEM supply imported and sold by Korea GM from its US headquarters. Particularly affected are the large sport utility vehicle (SUV) 'Traverse' and pickup truck model 'Colorado,' which have been driving about 20% of Korea GM’s domestic sales since their launch at the end of last year. The Traverse and Colorado are produced at GM’s plants in Michigan and Missouri, respectively, and imported into Korea. It is also reported that the Traverse still has around 1,500 pre-order units yet to be fulfilled.

A Korea GM official stated, "The quantities that need to be delivered immediately have already been shipped from the US and are being brought into the country, so there is no short-term supply issue," adding, "However, if the COVID-19 situation prolongs, we cannot rule out the possibility of an impact."

Chevrolet Traverse (Photo by Korea GM)

At the end of last year, Korea GM officially announced its plan to strengthen its imported OEM lineup by registering the Chevrolet brand with the Korea Automobile Importers & Distributors Association (KAIDA). The goal was to diversify the product lineup, which had been focused on small car segments, and to overcome handicaps such as poor price competitiveness caused by the perception of imported models as domestic cars. As a result, just six months after declaring itself an import car brand, Korea GM began to show results, ranking third in domestic imported car sales last month.

The anxiety caused by the US-originated COVID-19 fear is not limited to imported Chevrolet vehicles but also affects domestic Korea GM cars. Maintaining export volumes, including the Trailblazer, which is ramping up production ahead of its North American market launch, is a concern.

Currently, the production share of Korea GM’s North American export volumes is reported to be 50% at the Changwon plant and over 80% at the Bupyeong plant. Accordingly, it is known that they are considering adjusting scheduled overtime and special work shifts in the April production plan to be established at the end of this month.

This content was produced with the assistance of AI translation services.