GM won’t produce premium Impalas locally

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GM won’t produce premium Impalas locally

GM Korea decided not to start local production of the Impala, Chevrolet’s premium sedan, sending shock waves among its workers.

When the Impala was launched last August, it was very well received and the automaker said it may consider local production if it sold well enough.

But the Korean arm of U.S. automaker GM Tuesday said it decided to continue importing the model from the United States despite its local union’s demand to keep the promise.

As the Impala accounts for a large part of GM Korea’s sales, workers fear a broader scaling back and possible layoffs.

“Following thorough and comprehensive research, the company finally decided that it is more appropriate to continue to import the sedan,” the company said in a statement.

It gave three major reasons: keeping the cachet of the “Made in U.S.” label, worries about local environmental regulations on the product category, and the new investment needed to start production.

The sedan has sold 10,000 units since its release last August. Sales surpassed 2,000 units in March.

Management initially told the union that local production could begin if annual sales surpassed 10,000 units. But after James Kim took over as CEO in January, that target was raised to 30,000 units.

Local production of the Alpheon, the predecessor of the Impala in the premium segment, was shut down when the company decided to start importing Impalas.

A spokesman of GM Korea said, “Our managers have met with the union and all processes were appropriately conveyed.”

Another problem the company will face is timely deliveries of the car.

The Impala has been popular due to its price competitiveness and value. It has benefited from the Korea-U.S. Free Trade Agreement, which brought down duties on vehicles imported from the United States. However, its popularity was impacted by a shortage of supply, which sometimes led to four months waiting periods before the car was delivered.

“We have shortened the period to two months and we will put our utmost effort into improving customer satisfaction with regards to supply,” the spokesman added.

“We have considered all of these factors including the labor union and the customers and thought the [current] decision to be the best option.”

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