Korea GM and Renault Korea "Profitability Improved Last Year, But..."

Korea GM Bupyeong Plant Building

[Asia Economy Reporter Choi Dae-yeol] The profitability of foreign-affiliated automakers operating in South Korea improved somewhat last year. However, contrary to initial expectations, the prolonged shortage of vehicle semiconductors and other parts supply disruptions have continued into this year, leading to ongoing production setbacks, raising concerns that the recovery pace may slow down.

According to the audit report released by Korea GM on the 8th, the net loss for last year was 175.2 billion KRW, a reduction compared to the 296.8 billion KRW loss recorded in 2020. However, last year's sales also decreased to 6.9739 trillion KRW from 8.4975 trillion KRW in 2020. Operating losses increased to 376 billion KRW from 316.8 billion KRW in 2020. The company explained that the prolonged COVID-19 pandemic, combined with the global shortage of vehicle semiconductors, caused production disruptions, and rising raw material prices contributed to the losses.

Renault Korea Motors turned a net loss of 72.6 billion KRW in 2020 into a net profit of 16.2 billion KRW last year. Last year's sales rose by about 450 billion KRW to 3.8599 trillion KRW compared to the previous year, and operating losses shrank to 8.1 billion KRW from 79.7 billion KRW, about one-tenth of the previous year's figure.

This improvement is attributed to strong export performance of the domestically developed compact SUV XM3 to Europe and active cost-cutting measures. A Renault Korea Motors official said, "We made significant efforts in various activities to improve management conditions, including reducing fixed costs, and those efforts have been reflected in the results."

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