General Motors (GM) achieved a record-high sales performance last year. However, it has been found that the percentage of GM’s production in Korea decreased continuously. As for sales performance in Korea, it recorded the highest sales last year, and thus it is analyzed that, although the company sold a large number of cars in Korea, its contribution to industrial production in Korea has lowered.
According to GM Korea on the 18th, the company’s global sales (production) volume last year was 9.92 million cars. This is the company’s record-high performance as the volume increased by 2.1% from 9.71 million in 2013. Over the last several years, GM’s sales performance has been continuously increasing from 9.02 million in 2011 to 9.28 million in 2012 and again to 9.71 million in 2013.
As for domestic sales, GM Korea reached a record-high figure last year by selling 154,381 cars. As of Global GM, GM Korea’s sales performance increased continuously from 140,705 in 2011 to 145,702 in 2012 and 151,040 in 2013.
On the other hand, the percentage of production in Korea out of GM’s total production volume continued to fall. The percentage, which was 8.99% in 2011, dropped to 8.47% and 8.06% in 2012 and 2013 respectively and then rapidly to 6.34% last year. This is a result of GM’s production volume decrease in Korea from 810,854 cars in 2011 to 785,757, 782,721 and 629,230 in 2012, 2013 and last year respectively while the company’s global production volume increased.
As for the ratio of domestic production to sales, it decreased from 5.67 cars to 1 in 2011 to 5.39 to 1 in 2012, 5.18 to 1 in 2013 and 4.08 to 1 last year. This means that for every car sold in Korea, GM’s plant in Korea produced six cars in 2011 and only four last year.
Although the number of cars sold in Korea increased gradually, the company’s production has been continuously reduced. Last year, especially, the degree of decline in production amplified further as the company’s export volume decreased rapidly due to the withdrawal of Chevrolet brand from Europe. It is analyzed that GM is avoiding production in Korea because of the low labor flexibility and production environment surrounded by numerous regulations.
“As GM is a foreign company, it is bound to cut down on production once it finds that the conditions for production are inferior in light of its global strategy,” said an industry source. “It is burdensome for the company to increase production in Korea because production and labor costs are high and there are many regulations.”