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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

GM Korea posts record operating loss in 2017

  • PUBLISHED :March 01, 2018 - 23:02
  • UPDATED :March 01, 2018 - 23:04
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[THE INVESTOR] GM Korea posted a record loss of 800 billion won ($736 million) in 2017 after three straight years of deficits, according to provisional data from the carmaker.

In 2014, GM Korea’s operating loss stood at 148.6 billion won, with the figures rising to 594.4 billion won in 2015 and 531.2 billion in 2016. In terms of sales, the US-based carmaker’s 10.7 trillion won was the lowest since the 2008 global financial crisis.

The data was submitted to the government last month when the carmaker requested subsidies.

GM Korea has recently been at odds with Seoul after announcing plans to shut down a plant here. The Korean government and industry sources here argue that it’s not the performance of the local office, but other factors, such as the string of withdrawals by GM headquarters. 




For instance, the company’s decision to pull out its Chevrolet brand from Europe was a major blow, officials said. The region had been a significant export destination for the company. More than 137,000 cars manufactured at GM Korea’s plants headed for Europe in 2012, but the number fell to 61,954 in the following year. Last year, the company shipped only 205 cars to the region.

A lack of an attractive lineup, coupled with low transparency levels in management are also being cited as factors, along with an abnormaly high sales costs.

The fact that GM Korea paid heavy interest on loans given by headquarters, and the financial burden it shouldered in terms of R&D is not making GM look any better, industry watchers are saying.

Korea Development Bank, GM Korea’s second-largest shareholder, is currently looking into GM Korea’s financial records to see what kind of support can or should be provided. The carmaker is an unlisted company in Korea and has no obligation to report its finances.

By Cho Chung-un/The Korea Herald (christory@heraldcorp.com)

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