Park Jin-hai primarily focuses on K-dramas, entertainment shows and actor interviews. Beyond that, she also pens articles covering the broader arts scene, with a particular emphasis on classical music, dance and various aspects of lifestyle. Since joining The Korea Times in 2013, she has made significant contributions in the realms of hallyu (Korean wave), industry news and international affairs.
GM Korea needs segment upgrade
By Park Jin-hai
GM Korea may use the ongoing recall crisis hitting its parent firm to reposition itself for better profits, an analyst said Tuesday.
“It would be a make-or-break moment for GM Korea. The Korean plant, which mainly manufactures small cars like the Chevrolet Aveo, should upgrade the segment to Impala-level,” said Shin Chung-kwan, equity analyst for automotive industries at KB Investment & Securities.
He reasons that increasing labor costs make the Korean plant less attractive than its Chinese or Thailand rivals in the small-car segment.
Currently the U.S. automaker is in the process of overhauling the company from top down and expanding safety-related staff.
But upgrading the segment will not be easy for GM Korea.
“The same thing happened to Hyundai Motor, which over time shifted its focus from the Accent to Genesis. Unlike its rival, however, GM Korea doesn’t have that flexibility, as it doesn’t have the authority to make those kinds of decisions on its own,” he added.
The bright side of GM’s Korean affiliate is that its production plant is best suited to work as an export front for other Asian markets, including the fast growing Chinese market.
“The Korean plant boasts of great production efficiency ― better than American or European units. It has highly skilled labor, R&D (research and development) resources and a strong car parts industry. On top of it, it has FTAs (free trade agreements) with the U.S, Canada, EU and Australia,” Shin said.
Plus, since GM’s Australian plant is to close down in 2017, it is only reasonable for the Korean plant to absorb the production lot.
He added that if GM Korea appeals to its U.S. management about its strengths, it might see its production line expanded just like it did with its design center.
GM’s newly expanded design center opened in Incheon in April at a cost of $40 million. It became GM’s third-largest design center after those in the U.S. and Brazil.
“It happened because GM decided the Korean design R&D resources have advantages over others. It can also happen in the manufacturing side,” Shin added.