April 27, 2024

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[THE INEVESTOR] General Motor’s latest decision to sell its European operation Opel and Vauxhall won’t have an immediate impact on GM Korea, according to the local unit of the US carmaker on March 8. 

Earlier this week, the largest US automaker announced the sale of its underperforming European subsidiaries to France’s PSA Group, which owns the Peugeot and Citroen brands, for US$2.3 billion. The sale, which is expected to close by end of this year, will see GM withdraw from the world’s third largest auto market after racking up losses since 1999.

“The sales announcement won’t have an immediate impact on the Korean unit for now,” a GM Korea official told The Investor. “It is too early to speculate the deal effect on GM Korea as the sale process is still underway. We are closely watching the situation. For now, our production is operating at full force.”

Industry watchers, however, predict GM Korea may suffer sales decline in the long term, considering one-third of its total exports of 410,000 units were shipped to Europe last year, sold through the Opel and Vauxhall brands.

GM Korea currently produces two cars for the Opel brand. Chevrolet Trax, built at the automaker’s Bupyeong plant, is sold as Opel Mokka, while Chevrolet Spark, produced at its Changwon plant, is sold as Opel Karl, in the region.

“GM Korea’s exports to Europe are expected to decrease following GM’s sell-off of Opel,” said Lee Sang-hyun, a researcher at IBK Investment. “Parts makers that are highly dependent on GM Korea should diversify their auto clients.”



By Ahn Sung-mi (sahn@heraldcorp.com)