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.
REPORTERSNOTEBOOK falseGM Korea’s positioning sparks exit rumors
GM Korea's Trax Crossover / Korea Times file
By Lee Min-hyung
Chevrolet urged to diversify eco-friendly lineup
General Motors (GM) Korea’s vague market positioning is believed to be a key factor fueling persistent rumors about the automaker's potential exit from the local market.
The company is currently focusing on expanding sales of luxury vehicles from its premium Cadillac brand by releasing multiple electric vehicles (EVs) for the past few years, diverging from the strategies used by the firm’s flagship Chevrolet brand.
GM Korea’s sales rely heavily on Chevrolet’s Trax Crossover and Trailblazer SUVs. The carmaker sold a total of 43,799 domestically manufactured vehicles in November, but more than 99 percent of the sales came from just those two models, according to data from the carmaker. Only about 2 percent of November's sales were in Korea, with most vehicles exported to the United States.
No Chevrolet EVs are currently available for sale in Korea, but GM Korea’s recent move to expand Cadillac's EV lineup raises questions over the firm’s strategy here.
Cadillac launched its Lyriq electric SUV here last year, and recently released its flagship Escalade IQ SUV, featuring GM’s much-touted Super Cruise hands-free driving system.
GM Korea CEO Hector Villarreal, right, smiles during the launch event for Cadillac's Escalade IQ electric SUV in Seoul, Nov. 19. Yonhap
Chevrolet’s Equinox EV received sales certification from the Ministry of Climate, Energy and Environment last year, but its debut schedule has been delayed indefinitely.
GM Korea still maintains that it is not currently considering leaving the Korean market, but its strategy of focusing on high-end brands keeps raising doubts over the carmaker’s commitment.
The company is also set to close its nine directly operated service centers in February next year. It is the first time that one of the nation’s so-called top five carmakers — Hyundai Motor, Kia, KG Mobility, Renault Korea and GM Korea — has decided to stop operating directly-managed repair facilities. The carmaker explained that hundreds of affiliated service centers nationwide will take over, but the move has rekindled rumors of possible withdrawal from the country.
Industry officials said GM Korea will continue to be plagued by exit rumors unless it expands its eco-friendly lineup, including hybrids and EVs.
“The lack of new vehicles from Chevrolet is considered the biggest cause behind the rumor,” an auto industry official said.
“Even if Chevrolet does not release any new eco-friendly cars, Cadillac’s sales volume is very limited here, compared with that of Chevrolet. GM Korea has to diversify its auto lineup for Chevrolet to rebuild trust with Korean customers and avoid exit rumors.”