GM plans to invest $7.3 billion in GM Korea unit in the following five years, a move which will relieve concerns that the US automaker planned to reduce its presence in this market.
According to recent rumors, GM planned to cut output and lay off workers in Korea, especially after the automaker announced it plans to gain full control of GM Korea by purchasing a 17% stake from its biggest shareholder, a move seen as a restructuring plan. Worries increased at the end of last year after GM Korea said it will not manufacture the next-generation Chevrolet Cruze small car in this market.
Now, with this investment of $7.3 billion in improving engineering capabilities and manufacturing, proves the importance of the South Korean market as one of GM’s development and production base, despite the fact that the domestic market is relatively small.
“GM Korea will continue to play a major role in our global growth plans,” Tim Lee, head of international operations at GM, said in a statement.
Currently, GM Korea has five plants in this market and plans to manufacture 6 upgraded versions of models which are currently built, among which a global mini, midsize and small cars.