GM says Australia exit may benefit KoreaKorea could export more cars to Australia after General Motors closes its plants in the country in 2017, which could mean “a lot of opportunity” for Korean companies.
“Korea is producing high-quality cars,” said Stefan Jacoby, GM’s new international operations chief, at the Detroit Motor Show on Jan. 14. “It will have a major role in our manufacturing set-up in the region and there is a free-trade agreement (FTA) coming up between Australia and Korea.”
Australia’s ailing domestic car manufacturing industry could boost trade between the two countries, with Jacoby saying there is a “good likelihood” Korea could ship more cars to Australia.
He added that no final decision had been made.
The FTA reached between Australia and Korea in December immediately removes the 5 percent tariff on Korean passenger cars, paving the way for increased trade.
“GM Korea currently exports vehicles to Australia and we look forward to expanding our exports to Australia as a result of this FTA, but it would depend on local market demand and competition,” said GM Korea spokesman Park Hae-ho.
Passenger cars are Korea’s No. 1 export to Australia. In 2013, GM Korea exported 41,000 vehicles and 21,000 units of complete knockdown (CKD) to Australia.
Jacoby’s announcement comes after incoming GM CEO, Mary Barra, said GM “remains very committed to the Korean market.”
In December, GM announced job cuts in South Korea as a result of the withdrawal of its Chevrolet brand from Europe and said it planned to reduce production by as much as 20 percent in South Korea by 2016.
However, Park said GM has a “strong vehicle engineering, manufacturing and supply base” in Korea. “GM Korea will continue to play a significant role in GM’s global business. There is nothing decided on the future exports to Australia at this point of time,” he said.
BY ALLISON WORRALL contributing writer [firstname.lastname@example.org]