Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
GM Korea sells assets for sustainable business operations amid US tariffs
GM Korea CEO Hector Villareal holds a meeting with employees from the carmaker's factory in Changwon, South Gyeongsang Province, May 15. Courtesy of GM Korea
By Lee Min-hyung
Carmaker issues firm denial of exit rumors
General Motors (GM) Korea has decided to sell its unprofitable assets to ensure profitability and maintain sustainable operations here amid ongoing tariff pressures from the United States, the carmaker said Thursday.
As part of the decision, the company will gradually sell its nine after-sales service centers, as well as underused facilities and land at its main production site in Bupyeong, Incheon.
The decision has fueled concerns that the carmaker may take additional steps toward withdrawing from the Korean market, given its sales structure's heavy reliance on exports to the U.S.
GM Korea is also subject to a 25-percent tariff imposed by the Donald Trump administration.
However, the company firmly denied rumors of a potential exit, stating that the latest measures are intended to "secure business efficiency" and support its sustainable operations here.
“Our directly controlled service centers have remained unprofitable, so we decided to stop their operations and, instead, strengthen our ties with 386 partnered repair centers across the nation,” a GM Korea spokesperson said. "They offer a similar level of repair services as the GM-controlled services centers."
After Trump started slapping the massive tariff on all imported vehicles in April, many critics raised the possibility that the carmaker may end up shutting down its Korean operations. GM Korea’s exports to the world’s largest economy accounted for 83.8 percent of its total vehicle production in 2024.
Some have also suggested that the company may bring the issue to the negotiating table with the government, as it did in 2018, when GM Korea received 810 billion won ($585.7 million) from the state-run Korea Development Bank (KDB) in exchange for a commitment to maintaining its operations here for a decade.
GM Korea's Chevrolet Trailblazer SUV / Courtesy of GM Korea
At the time, GM Korea closed its Gunsan plant due to similar profitability issues. Currently, the company operates two production lines in Changwon, South Gyeongsang Province, as well as in Bupyeong.
However, a company official said the rumors are far from the truth, explaining that the sale of non-core assets is a common practice companies undertake for risk management.
“GM Korea is in talks with the KDB, and both sides are discussing measures for the firm’s continued operations here,” the official said. The KDB obtains a 17.02-percent stake in GM Korea.
In a statement, GM Korea CEO Hector Villarreal reaffirmed the company’s commitment to sustainable operations in Korea, emphasizing that the carmaker still has years of vehicle production planned in the country. He pledged to improve business efficiency through the latest asset rebalancing measures.
Experts, however, remain pessimistic over the carmaker’s latest decision.
“One of the most difficult parts when carmakers start new business here is to build service centers nationwide due to regulatory hurdles,” said Lee Ho-geun, an automotive engineering professor at Daeduk University.
For instance, BYD, a Chinese electric vehicle maker that entered the Korean market in January, still faces difficulties in doing so, he noted.
“I would say that the carmaker opts to withdraw from Korea, or receive additional funds equivalent to the one from 2018 from the government,” he added.