Different companies have different ways at looking at markets. While, the decision to pull out of the Indian market in 2017 by General Motors, once the largest car manufacturer in the world raised eyebrows in the business community as it sort of contradicted the Indian government’s Make in India pitch, South Korea-based Kia Motors thinks otherwise and looks at India as a lucrative future market and has announced its business and investment intentions.
The future of General Motors in South Korea is in doubt after the North American carmaker announced that it plans to shutter the Gunsan plant at the end of May claiming it was under-utilized.
In a statement GM said the closing was the “first step” in what it deems a “necessary” restructuring of its operations in the country. While doing so, GM says it will incur US$850mn in charges between writing off non-cash assets and paying out some US$375mn in “employee-related cash expenses.”
Industry watchers believe that GM wants more sops from the Korean government as an incentive for to keep its business running.
GM Korea has posted losses topping US$1.5bn over the past three reporting years, last making a profit in 2013 – the same year GM ceased exporting Chevrolet models from Korea to Europe.
“The performance of our operations in South Korea needs to be urgently addressed by GM Korea and its key stakeholders. As we are at a critical juncture of needing to make product allocation decisions, the ongoing discussions must demonstrate significant progress by the end of February, when GM will make important decisions on next steps,” said Barry Engle, GM executive vice president and president of GM International.