Korea GM Asset Sale Sparks Withdrawal Rumors Again... "No New Vehicle Plans This Year"

President Hector Attends Emergency Video Conference with Headquarters
Discussion Focuses on Profitability, But No New Vehicle Plans Announced
Union States: "We Will Not Stand By After Being Notified of Asset Sales"

Speculation about GM's possible withdrawal from Korea has resurfaced after Korea GM announced its decision to sell off assets at its directly operated service centers and part of its Bupyeong plant. While Korea GM explained that these are unavoidable measures to improve profitability, the rumors persist, as the company has not presented any clear new vehicle production plans for several years.

According to the industry on May 29, Hector Vizarel, President of Korea GM, met with the labor union on May 28 and stated, "The asset sale is intended to improve profitability, not as a step toward withdrawing from the Korean market." He added, "There will be no impact on employee jobs, and this is a necessary action to overcome the current situation."

Vizarel also emphasized the importance of the Korean plant, saying, "Among the countries exporting to the United States (Mexico, Canada, China, and Korea), Korea is the only one whose production volume is being protected."

After the United States announced the imposition of tariffs, GM increased production at the Bupyeong plant by an additional 31,000 units. Industry insiders believe that, in order to completely dispel the withdrawal rumors, it is necessary to allocate new eco-friendly vehicle models for production after 2027, rather than simply increasing the output of current models.

On this day, Korea GM announced plans to sequentially sell its nine directly operated service centers nationwide, as well as underutilized assets at the Bupyeong plant. After-sales service for previously sold vehicles will continue to be provided through 386 partner maintenance centers.

Hector Vizarel, President of Korea GM, visited the Changwon plant on the 16th and spoke with employees. Photo by Korea GM

Prior to announcing this plan, Vizarel attended a global emergency meeting held at GM headquarters via video conference on the morning of May 28, where he discussed responses to tariffs and strategies for securing profitability at the Korean operation. However, it was reported that there was no mention of allocating new vehicle models to the Bupyeong or Changwon plants during the meeting.

At a business status briefing held at Korea GM’s Bupyeong headquarters on May 23, management also stated that there were no plans for next-generation new vehicle production, plug-in hybrid (PHEV) development and production, or small electric SUV production. Instead, they only revealed plans to produce updated versions of the current internal combustion engine models.

Looking at past cases in markets such as Australia, Indonesia, Thailand, and India, GM has always cited deteriorating profitability as the reason for withdrawing local plants. This means that rising tariffs and logistics costs, as well as increased labor costs, can all be factors behind such decisions. An industry official said, "With U.S. tariffs raising production costs, and with only updated models being produced, it is questionable whether the current export volume can be maintained. Given that Korea GM’s domestic sales are also sluggish, a decline in profitability seems inevitable."

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