Retail News CRM

Tag: GM korea

  • GM Korea’s union has plan to get workers paid

    GM Korea’s union has plan to get workers paid

    GM Korea’s union is planning to request further government support for employees who took unpaid leave after the shutdown of the Gunsan manufacturing plant last year. The decision, outlined in a follow-up document detailing a GM Korea union meeting held on Jan. 22, could go back on the original arrangement with the company to share the cost burden of supporting employees who went on unpaid leave.

    Since GM Korea’s Gunsan plant closed last year, the government provided support for six months, until November, to hundreds of workers who took unpaid leave. The company and its union decided to each cover half of the support payments, or 1.125 million won ($1,000) for every worker, for 24 months after the end of the government support. According to the document, the union will work towards gaining further government support by recategorizing unpaid-leave workers as paid-leave workers.

    According to the Ministry of Employment and Labor, companies can apply for government support for workers on paid leave to partially cover their payment. If the company pays 70 percent of the pay for employees on paid leave, the government can provide around two-thirds the amount for up to 180 accounting days.

    The document said the change would require agreement from the company and approval from the Labor Ministry. GM Korea said it has paid what it owes to workers on unpaid leave. It declined to comment on the union’s plans. Korea Development Bank completed last month injection of $750 million into the struggling company.

  • Korean SUV sales soar globally

    Korean SUV sales soar globally

    SUVs have recently grabbed the spotlight in Korea, breaking both local and export sales records. According to the Korea Automobile Manufacturers Association (KAMA), the number of exported SUVs by five local automakers reached a new record of 1.38 million units in 2018, a 6.7 percent increase from the previous year. In just 17 years, the figure rose by 700 percent – exports recorded merely 196,111 units in 2000.

    Over the same period, overall exports of passenger vehicles declined 3.1 percent to 2.34 million units. The share of SUVs also reached an all-time high.

    Compact SUVs from Korea were most popular in export markets.

    GM Korea’s Chevrolet Trax was shipped the most, at 239,800 units, followed by Hyundai Motor’s Tucson at 228,461 units.

    Small-sized SUVs also performed well, with 202,779 units of Hyundai Motor’s subcompact SUV Kona shipped abroad, a 437 percent rise from the previous year.

    Kia Motors’ Stonic exported 58,989 units, increasing 75.8 percent from 2017.

    Much of the enthusiasm surrounding SUVs in markets abroad was also present in the local market.

    Last year, 519,883 SUVs were sold in Korea, passing the 500,000 unit mark for the first time.

    With a 12.7 percent rise from 2017 sales figures of 461,385 units, SUVs currently take up a 40.1 percent share in the overall passenger car sales figures.

    Meanwhile, passenger car sales, excluding SUVs, dropped 6.9 percent last year from the previous year.

    Hyundai Motor’s mid-sized SUV, the Santa Fe, was the most popular in Korea, selling 107,202 units. This was the first time that an SUV model recorded an annual sales figure over 100,000 units.

    The SUV market is expected to grow this year.

    As compact and small-sized SUVs are poised to lead exports and medium and small-sized SUVs the local market, large-sized SUVs are also being rolled out this year.

    Hyundai Motor’s Palisade, unveiled last November, recorded over 25,000 preorders in just three weeks, hitting 62.5 percent of the automaker’s annual sales target of 40,000 units for the model.

    It will likely take customers around seven months to receive the vehicle if ordered now.

    According to Hyundai Motor, the large-sized SUV is popular among older drivers. Customers in their 40s accounted for 37 percent of orders and those in their 50s made up 26.9 percent.

    “As high-quality amenities and vehicle stability that used to be developed through sedans is now applied to SUVs, there was quite a bit of progress,” said Kim Pil-soo, a professor of automotive engineering at Daelim University.

    “This year’s SUV sales and market share will grow as local and foreign SUVs have adopted the advantages of sedans,” added Kim.

    Lees ook:

    Lees ook:

    Lees ook:

  • GM Korea to cut prices after disappointing sales

    GM Korea to cut prices after disappointing sales

    GM Korea, the Korean unit of General Motors, said Tuesday it has cut the prices of mainstay models in an effort to revive lackluster sales. Starting Tuesday, GM Korea revised the prices of its major models — such as the Impala sedan, Trax, and Equinox sport-utility vehicles — by up to 3 million won ($2,700). The company expects its “customer-focused pricing approach” to strengthen the position of those key Chevrolet vehicles in the Korean market, Cesar Toledo, vice president in charge of sales, customer care and aftersales at GM Korea, said in a statement.

    “Winning more customers, growing market share and sustaining trust in our brand are all crucial ingredients in building a sustainable GM Korea for the long term,” he said.

    GM Korea struggled with weak sales in Korea due to a lack of new models and labor-management disputes over jobs last year.
    In the January-November period, GM Korea’s sales fell 12 percent to 420,447 vehicles from 479,058 a year earlier. Sales figures for December are set to be released today.

    To drive up sales, the carmaker plans to introduce 15 vehicles into the local market over the next five years. It has launched the U.S.-made Equinox and the upgraded Chevy Spark since June. The Traverse SUV will be the next model to be added to its lineup.

    GM holds a 77 percent stake in GM Korea, with the state-run Korea Development Bank and SAIC Motor controlling 17 percent and 6 percent, respectively.

    Lees ook:

    Lees ook:

  • SUVs are selling more in Korea

    SUVs are selling more in Korea

    Korea’s domestic car market moved in two different directions this year. The rising popularity of large sedans and sport utility vehicles (SUVs) stood in sharp contrast to weaker demand for smaller vehicles, industry data showed Sunday. In the January-November period, Hyundai Motor, Kia Motors, GM Korea, Renault Samsung Motors and SsangYong Motor sold a combined 698,326 units, up 0.3 percent from 696,403 cars sold a year earlier, the data showed.

    Demand for medium SUVs, such as Hyundai’s all new Santa Fe, reached 207,269 units, up a sharp 29.5 percent from the same 11 months in 2017.

    The total so far is expected to push medium-sized SUVs to become the country’s top-selling vehicle type on an annual basis in 2018. This will mark the first time such crossovers have taken the top spot in Asia’s fourth-largest economy, where car buyers generally tended to favor mid- to large-size sedans.

    In regard to larger crossovers, the popularity of SsangYong’s G4 Rexton caused sales of such cars to jump 12.9 percent on year to 46,734 units, further pushing up overall SUV numbers.

    Industry watchers said the release of Hyundai’s three-row Palisade and a longer version of SsangYong’s G4 will further fuel sales going into 2019, with numbers likely to get a further boost once Kia releases its own large SUV that is expected to get the Telluride name.

    Besides SUVs, sales of large sedans, centered on Kia’s K9 luxury sedan, caused total numbers to rise a respectable 5.7 percent to 52,945 units up till November despite drop in demand for Hyundai’s luxury Genesis EQ900 falling off compared to the year before.

    On the other hand, sales of midsize and smaller vehicles dipped 0.9 percent on year to 481,542 units, with demand for small city cars dropping 7.5 percent to 115,647 units.

    “Vehicles like the Sante Fe clearly bolstered demand this year, with this trend likely to continue with the release of the Palisade and new versions of the G90 and G80 to further contribute to sales growth for bigger cars going into 2019,” an industry source said.

    Lees ook:

    Lees ook:

  • KDB to pay GM Korea by the end of the month

    KDB to pay GM Korea by the end of the month

    The state-run Korea Development Bank (KDB) said Thursday it will complete its injection of $750 million into the Korean unit of General Motors later this month, ending a controversy over GM Korea’s plan to spin off its research unit. The KDB and GM signed a deal in May on the rescue package for GM Korea.

    Under the agreement, the KDB pledged to inject $750 million, while GM agreed to provide $3.6 billion in fresh loans to keep GM Korea afloat.

    The condition to the additional investment was that GM would keep its Korean operation open for a minimum of 10 years.

    In June, the KDB injected $375 million into GM Korea, but the bank said the remaining half may not be provided amid concerns that the U.S. carmaker may keep only its research facility in Korea and eventually shut down its manufacturing facilities here.

    KDB Chairman Lee Dong-gull in October told lawmakers that the remaining investment may not be executed, depending on policy decision.

    The KDB’s decision came after GM Korea submitted details of its spin-off plan to the bank, the second-largest shareholder of GM Korea.

    The KDB has a 17-percent stake in GM Korea.

    The KDB said it will buy about 11.9 million preferred shares of GM Korea for 404.5 billion won ($360 million), or 33,932 won per share.

    The transaction will be made on Dec. 26, the KDB said.

    The May agreement prohibits GM from selling any stake in GM Korea over the next five years and limits GM’s right to sell shares or assets in GM Korea for 10 years.

    Lees ook:

  • Korea’s car companies discuss challenges

    Korea’s car companies discuss challenges

    Representatives of Korea’s major automakers and parts makers and industry officials gathered in Seoul Wednesday to discuss ways to breathe new life into the sluggish sector. The chief executives of the big five automakers — Hyundai Motor, Kia Motors, GM Korea, Renault Samsung and Ssangyong Motor — and their local parts makers and industry associations explored ways to tackle daunting challenges facing the industry.

    Korea’s auto industry is going through a hard time after GM Korea shut down its underutilized Gunsan plant in May, and Hyundai and Kia have been posting generally disappointing earnings this year.

    Small and medium-sized companies that make parts for the carmaker were more vulnerable to falling sales, with more than one-third of such Korean auto parts makers posting losses in the first half of this year, data by the think tank Korea Institute for Industrial Economics and Trade showed.

    They are also in the crosshairs as the United States is weighing slapping tariffs on foreign-made autos and auto parts on national security grounds.

    The participants called for the government to boost domestic demand, provide financial assistance to cash-strapped parts makers and lower regulations in emerging sectors, such as autonomous and electric vehicles.

    The automakers said they will seek ways to maintain over 4 million units in domestic car production and raise the number to 4.5 million by 2025.

    Hyundai Motor, the nation’s leading automaker, said it will invest 220 billion won ($193.8 million) over the next two years to develop an advanced lineup of its hydrogen-fuel electric car Nexo, with a goal of releasing over 30,000 units in the domestic market in 2022.

    GM Korea said it will hold trade shows to help its local contractors tap into the global market and supply 70 billion won in subsidies for small- and medium-sized contractors.

    Renault Samsung said it will operate a research and development fund worth 35 billion won by 2020 and form an alliance with Nissan and Mitsubishi to help its contractors make bids overseas.

    Ssangyong Motor promised to expand use of Korean-made parts and support its contractors in India.

    The Ministry of Trade, Industry and Energy said it will join industry efforts to overcome challenges and drive innovation in the sector.

    “If the auto industry and the government work together, we can come up with measures to deal with the hardship,” Industry Minister Sung Yun-mo said during a meeting with them.

    “We will gather opinions to prepare support measures, especially for parts manufacturers.”

    The ministry said it will unveil a comprehensive support package for the auto industry next month, which includes financial and R&D support as well as deregulatory measures.

    Lees ook:

    Lees ook:

  • GM chairman might visit Korean facility

    GM chairman might visit Korean facility

    General Motors Chairman and CEO Mary Barra hinted at visiting Korea soon amid conflict over the spinning off of the Korean unit’s R&D division. If the trip happens, it would be Barra’s first visit to the Korean operations since she became chairman in 2016.

    GM Korea head Kaher Kazem reiterated the company’s commitment to the market during a government audit held Monday. “I would like to visit our Korea operations at some point soon,” Barra wrote in a letter sent to labor union head Lim Han-taek on Oct. 24.

    Lim had requested a meeting with Barra over GM’s decision to spin off the R&D division.

    Since July, GM has been pushing to build a separate R&D center tentatively named GM Korea Technical Center. Management says it will raise work efficiency and competitiveness.

    The labor union has opposed the idea, claiming a separate R&D center will eventually result in the ending of production in Korea, resulting in massive layoffs. On Oct. 19, the automaker approved the plan in a board meeting despite the opposition.

    In the letter, Barra emphasized GM’s dedication to its Korean operations.

    “The specialized unit will benefit from focused management, increased transparency on cost and improved operational efficiency,” Barra wrote in the letter.

    “We think the demerger is an important step to allow both the engineering services company and the manufacturing unit to stand on their own as profitable, viable businesses.”

    During a government audit held Monday at the National Assembly, GM Korea CEO Kazem said the company “has no plan to withdraw from Korea.” His comments assured lawmakers the spinoff is part of GM’s plan to stay in Korea longer than the initially promised 10 years.

    “In fact, we are establishing a long-term commitment to GM Korea. [Building a separate R&D center enables] us to not only upgrade but also introduce new models. We are committed to building a very long-term future for GM Korea,” Kazem said. “The framework agreement says 10 years, but we are looking at longer than that.”

    Kazem added that the company is engaging a number of parties on the possible redevelopment of the currently shut-down Gunsan factory, but he didn’t reveal details. He said he would “review” whether the plan for the Gunsan factory site could be included in the initial framework agreement.

    GM abruptly shut down the Gunsan factory in May. GM Korea has since been beset by speculation of completely shutting down in the country.

    The company and the Korean government have decided to jointly invest 7.7 trillion won ($6.7 billion) to save the ailing unit. GM also promised to stay in the country for the next 10 years.

    A GM Korea official said that Barra’s visit to the country is not yet confirmed.

    Lees ook:

    Lees ook:

  • GM Korea votes to spin off R&D unit

    GM Korea votes to spin off R&D unit

    A GM Korea shareholders’ meeting Friday decided to spin off its R&D and design department, reigniting conflict with its labor union and the state-owned Korea Development Bank (KDB), the automaker’s second-largest stakeholder.  “The plan to establish a dedicated engineering unit, GM Technical Center Korea, was approved during the shareholders meeting,” GM Korea said in a statement.

    However, the decision is guaranteed to be controversial since KDB, which owns 17-percent of GM Korea, intended to vote against the spinning off of R&D and design unit from production but missed the shareholders’ meeting.

    “We received notification of the shareholders’ meeting, but the decision was made in our absence,” an official at the KDB bank said. “We were not able to exercise our veto rights since we weren’t there.”

    GM Korea’s unionized workers occupy the hallway leading to the GM Korea chief executive’s office at the company’s headquarters in Bupyeong District, Incheon, on Friday in an effort to stop a shareholders’ meeting from taking place

    It’s not clear why KDB representatives didn’t attend. KDB said it will be looking into the legality of the meeting.

    On Thursday, KDB released a statement saying it would ask GM Korea’s management to explain fully its decision to spin off the R&D and design center and decide whether to exercise its veto rights.

    The statement was released after a court in Incheon rejected KDB’s request for an injunction to stop the shareholders’ meeting.

    “Although we respect the judgment of the Incheon court, we have deep concerns about GM Korea’s push to spin off [R&D and design] without sufficient explanation or agreement from the interested parties during the shareholders’ meeting,” the bank said in the statement.

    GM Korea’s union claims the spin-off is the first step in a long-term plan to completely halt domestic production.

    KDB has the right to nullify any GM Korea decision to sell more than 20 percent of its total assets, which is supposed to prevent the U.S. automaker from pulling out of Korea or restructuring without the consent of the bank.

    That right, which expired in October 2017, was reinstated after GM and the Korean government reached an agreement in April.

    However, it’s not clear whether that veto right can be applied to spinning off units within GM Korea. There’s even arguments that the newly forming center may not account for 20 percent of the automaker’s total assets.

    The union tried to stop the shareholders’ meeting by occupying a hall leading to GM Korea CEO Kaher Kazem’s office in Bupyeong District, Incheon. The union earlier this week voted in favor of a walkout that will likely take place next week.

    A crisis that led to the shutdown of one of GM Korea’s four plants in Korea in May seemed to have been solved when GM and the Korean government reached an agreement after long negotiations to inject $7.15 billion into the struggling automaker. GM agreed on covering $6.4 billion while KDB put up $750 million. GM agreed to keep the local unit going for at least 10 years.

    But in July, GM Korea announced the spinning off of its R&D center, which will turn Korea into its global strategic development and design center for next generation models.

    Meanwhile, production of compact vehicles will end in 2022 and factories will concentrate on SUVs.

    “The establishment of a dedicated GM Korea Technical Center is an important development in continuing our organization,” said GM Korea CEO Kazem in a letter sent to employees on Monday, adding that the new center would help to “more effectively respond to and secure and execute global engineering projects.”

    Lees ook:

    Lees ook:

  • GM Korea to sell 10 Chevrolet Aveo compacts online

    GM Korea to sell 10 Chevrolet Aveo compacts online

    GM Korea said on Sept. 19 it will sell 10 units of its new Chevrolet Aveo compacts via Auction, a local online shopping site affiliated with eBay Korea, on Sept. 26.

    This is the first time in Korea that a carmaker has decided to sell vehicles online.

    Even though the unprecedented online car sale seems more like a marketing activity, industry watchers say other carmakers could follow suit considering consumer reaction, especially among youngsters who prefer online shopping rather than visiting physical shops.

    “Through the collaboration with Auction, we hope to appeal to female drivers in their 30s and 40s, the new Aveo’s target customers,” a GM Korea official said.

    In August, Ticket Monster, a daily-deal site, stirred controversy after it sold 20 Jaguar XF sedans via its website without consulting the carmaker’s UK headquarters. Jaguar Land Rover Korea at the time hinted at a legal action for damage to its brand value and creating confusion.

    The retail price of the Aveo is 17.79 million won (US$16,000). GM Korea plans to offer diverse benefits to those who purchase the car online, including online cash points worth 5 million won.

     

    Lees ook: