GM "Internal Combustion Engine Vehicle Production to End by 2035"... What About Korea GM?

Korea GM Under Business Normalization: Long-Term Outlook Depends on Electrification

[Image source=AP Yonhap News]

[Asia Economy Reporter Yu Je-hoon] General Motors (GM), the largest automobile manufacturer in the United States, has decided to stop producing internal combustion engine vehicles by 2035, drawing attention to the future of Korea GM. Since Korea GM has not yet been allocated electric vehicle production volumes from the headquarters, and as the global automotive industry's focus has solidified on 'electrification,' analyses suggest that its future depends on whether it can join the electric vehicle lineup.

According to the industry on the 31st, GM CEO Mary Barra stated in a press release on the 28th (local time), "By 2035, GM will fill its entire vehicle lineup with electric vehicles," adding, "The goal is to achieve carbon neutrality by 2040 through this."

Under this policy, GM will cease production and sales of internal combustion vehicles, which currently account for 98% of sales and profits, by 2035, transitioning to an electric vehicle production and sales system. The internal combustion vehicle business is expected to be reduced to commercial large trucks. To this end, GM plans to invest $27 billion (approximately 30.2 trillion KRW) in future vehicle technology research and development (R&D) over the next five years.

As GM accelerates its restructuring, industry attention is focused on Korea GM. Korea GM still appears to be emphasizing business normalization. Although struggling in the domestic market, exports reached 285,499 units last year, led by the Sports Utility Vehicle (SUV) Trailblazer produced at the Bupyeong plant. Additionally, development of the next-generation Crossover Utility Vehicle (CUV) aimed for mass production in 2023 is underway.

However, despite this normalization, there are many forecasts that long-term survival may be difficult without electrification in the mid to long term. Since GM has declared it will stop producing internal combustion vehicles by 2035, if electrification is not achieved, Korea GM could lose its position as a simple production base.

So far, Korea GM is only importing and selling the Bolt EV from the headquarters without any separate allocation or production of electric vehicles. The new CUV planned for future production is also an internal combustion vehicle. The labor union has demanded allocation of electric vehicle volumes but has yet to receive any significant response.

Kaher Kazem, President of Korea GM, recently told reporters regarding electric vehicle allocation, "We have attracted investment while establishing a business normalization plan, and as part of that, we are focusing on two major global products: SUV and CUV," expressing a general stance.

Industry insiders believe that for Korea GM to receive electric vehicle volume allocation from the headquarters in the future, it must first focus on securing production stability. President Kazem also stated, "Since Korea GM has a very high export ratio, customers need assurance that vehicles will be supplied reliably," adding, "Frequent disputes and strikes cause consistent production disruptions every year, which could create an image of uncertainty regarding the headquarters' investment and volume allocation decisions, so a stable labor environment is necessary."

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