A GM worker makes a final check at the company's Incheon plant in Incheon, South Korea (Photographer: Seokyong Lee/Bloomberg News)
GM Korea had an optimistic start to the year. The Detroit automaker’s arm in the world’s 10th-largest car market gleefully predicted in February that 2017 would be a record year for sales. They aimed to capture a 10% market share of Korea’s auto market, selling 14,000 more vehicles than in 2016.
Instead, sales figures for October indicate a 54% drop from the previous year. Sales are down this year overall by 24%. The situation is so dire that community leaders, fearing job losses of up to 16,000, have formed coalitions like the “Citizens Movement for Purchasing Chevrolet” and have organized guerilla advertising campaigns to encourage folks to buy GM Korea products.
Thanks to the slump, rumors now abound that GM will exit South Korea altogether. The appointment by GM Korea of a so-called “restructuring specialist,” falling sales and the selling off of other major global subsidiaries are all pushing insiders to speculate that GM's Korean subsidiary will soon go kaput.
This possible exit isn’t an isolated event among American automakers. Across the board, they’re increasingly focused on China and the United States, the world’s two-largest auto markets.
All in on China
GM has slashed its global presence this year after a slew of failed attempts to enter growing markets. Though India is set to become the world's third-largest auto market soon, GM announced in May that it will stop manufacturing cars for domestic consumption there. It pulled in less than 1% of sales in India this year despite a 20-year presence. GM will also stop selling in South Africa after five years of falling sales.
General Motors sold its European subsidiary Opel/Vauxhall to Groupe PSA, a Paris-based automaker, in March. It previously sold Chevrolet-branded vehicles in Europe before phasing them out in 2013.